Research On The Impact Of Green M&A On Corporate Debt Financing Costs

Economic development inevitably requires energy consumption,so carbon emissions are closely related to economic development.However,the rapid development of the economy in recent years has also resulted in an energy crisis and increasingly severe environmental problems.Due to this phenomenon,the 18 th National Congress of the Communist Party of China in 2012 included the construction of ecological civilization as part of the overall layout of the Five in One for the very first time in its history.Since then,a series of measures have demonstrated China’s determination for green development.Under this policy background,green transformation of enterprises is the general trend.As the fastest way of green transformation,green M&A combines the resource integration effect brought by M&A with the concept of green sustainable development,which is a relatively comprehensive reform for enterprises and will affect their ability to obtain resources.Debt financing costs,an important factor restricting corporate borrowing funds,are highly likely to be affected by green mergers and acquisitions.Therefore,this study of the impact of green mergers and acquisitions on corporate debt financing costs has important significance.On the one hand,it can promote green transformation through green mergers and acquisitions,and on the other hand,it provides new ideas for enterprises to reduce debt financing costs.Firstly,based on CSMAR Guo Tai An Database and Wind Database,this paper selects ten years of merger and reorganization data from 2012 to 2022,uses content analysis method to screen out green merger and acquisition samples,and conducts four-stage data processing on debt financing costs.The study found that green mergers and acquisitions can significantly reduce the debt financing costs of enterprises compared to non-green mergers and acquisitions;Secondly,this paper verifies the robustness of the model by changing the sample interval and the method of measuring the debt financing cost of the explained variable;Third,this paper analyzes the heterogeneity of samples of green M&A firms from the perspectives of firm size,financing constraints,and government policies.Research has shown that the larger the size of the firm,the weaker the financing constraints,and the more active the policy,the more green M&A can significantly reduce firms’ debt financing costs;Then,this article analyzes the mechanism from the perspectives of debt paying ability and rating,and finds that green mergers and acquisitions can significantly improve the cash flow interest protection ratio,improve ESG and corporate credit rating,and thereby reduce the debt financing cost of enterprises;Finally,This article concludes with corresponding suggestions from government,corporate and investor perspectives.The existing research on green mergers and acquisitions mostly focuses on driving factors and performance impacts,while few scholars have conducted research on green mergers and acquisitions and debt financing costs.Therefore,the innovation of this article lies in:(1)This article enriches the theoretical research on green mergers and acquisitions and debt financing costs;(2)This article provides reference suggestions for enterprises to conduct green transformation through green mergers and acquisitions;(3)This article provides a new idea for enterprises to reduce the cost of debt financing.