Green M&A, legitimacy and risk-taking: evidence from China's heavy polluters

摘要

Green merger and acquisition (M&A) activities may improve heavy polluters' regulatory and organisational legitimacy, allowing greater access to resources and enhancing risk-taking capacity. Adopting a proprietary 2008-2013 dataset, we examine outcomes from green M&A for China's heavy-polluting firms. We find that heavy polluters' green M&A is associated with greater risk-taking. Greater access to resources, and reduced financing constraints and tax liabilities suggest improved legitimacy. These effects are positively related to state ownership and government intervention in the M&A process. Our findings support the Porter hypothesis and have policy implications for green management of heavy polluters in emerging markets.