Does corporate ESG create value? New evidence from M&As in China

Zheng, Zhigang; Li, Jiarong; Ren, Xingzi; Guo, Jie Michael

Abstract

Using a large sample of Chinese companies' domestic M&A, this study provides new evidence on the financial payback of corporate ESG and its dynamics. We find that acquirers' ESG rating is positively correlated to post-M&A performance and deal completion likelihood. Additionally, we find the relationship between acquirer's ESG dynamic and post-M&A performance is contingent on the firm's previous ESG standards. Overall, these findings are in line with the instrumental stakeholders' view that high ESG performance could earn support from stakeholders for post-M&A synergy creation and emphasize the asymmetric marginal outcome of firms' ESG efforts as a result of diminishing marginal utility of stakeholders.

Citation

Zheng, Z., Li, J., Ren, X., & Guo, J. M. (2023). Does corporate ESG create value? New evidence from M&As in China. Pacific-Basin Finance Journal, 77, Article 101916. https://doi.org/10.1016/j.pacfin.2022.101916

• Journal Article Type: Article
• Acceptance Date: Dec 8, 2022
• Online Publication Date: Dec 14, 2022
• Publication Date: 2023-02
• Deposit Date: Dec 28, 2022
• Publicly Available Date: Jun 15, 2024
• Journal: Pacific-Basin Finance Journal
• Print ISSN: 0927-538X
• Electronic ISSN: 1879-0585
• Publisher: Elsevier
• Peer Reviewed: Peer Reviewed
• Volume: 77
• Article Number: 101916
• DOI: https://doi.org/10.1016/j.pacfin.2022.101916
• Public URL: https://durham-repository.worktribe.com/output/1186300