The Impact Of M&A Activities On Corporate ESG Performance

In recent years,The Chinese economy has moved from a phase of rapid growth to a phase of high-quality development.High-quality development is the theme of China’s economic and social development in the "14th Five-Year Plan" and even in the longer term and is related to the overall situation of China’s socialist modernization.As a microscopic subject of economic development,whether enterprises can take substantial steps in achieving high-quality development,to promote China’s economy to achieve high-quality development has a decisive impact.At present,China’s economic development has reached the "new normal",with the continuous promotion of removing production capacity and leverage,the acceleration of the restructuring process of state-owned enterprises,and the strategic deployment of "industrial upgrading",the role of mergers and acquisitions to optimize the economic structure,drive the development of enterprises,and achieve transformation and upgrading The role of M&A in optimizing economic structure,driving enterprise development and achieving transformation and upgrading is also becoming more and more obvious.Therefore,based on the unbalanced panel data of M&A transactions of Chinese listed enterprises from 2011 to 2020,this paper explores the relationship between M&A activities and ESG performance of Chinese enterprises,so as to provide practical paths for Chinese enterprises to effectively improve ESG performance and achieve high-quality development,as well as to provide policy suggestions for China’s sustainable development path.This paper investigates the impact of corporate M&A activities on corporate ESG performance by taking whether or not a firm engages in M&A activities as the main explanatory variable and controlling for other considerations that affect corporate ESG performance,such as firm size,return on net assets,leverage ratio,and age.The empirical results show that a firm’s M&A activity positively affects its ESG performance.The results of testing each of the three sub-indicators of the ESG score show that the impact of M&A activity on E(environment),S(society)and G(governance),although reflected in the year of the transaction,is more significant in the year following the transaction.The results of group tests on the sample firms show that although both SOEs and non-SOEs engage in M&A investment activities have a positive impact on their own ESG performance,the impact is stronger for non-SOEs in comparison;relevant policies can effectively promote the impact of M&A activities on corporate ESG performance,and in 2018 and subsequent years,as the state introduces more policies to promote green investment,the activities have a more obvious positive effect on acquirers’ ESG performance.In summary,in the context of high-quality development and green economy,as countries accept the sustainable development goals proposed by the United Nations(UN)and more and more international organizations continue to pay more attention to the concept of sustainable development and ESG indicators,Chinese companies inevitably need to effectively improve their ESG performance in the development process to adequately respond to the changing rules while achieving higher quality development The need for Chinese companies to effectively improve their ESG performance in order to respond to changing rules and achieve higher quality development is inevitable.M&A activities can play an active role in achieving these goals by expanding existing resources and extending business functions,improving corporate governance capabilities for more efficient transformation and upgrading,and conducting investment layouts in a rational and orderly manner.