Air pollution and green mergers and acquisitions: An empirical study on heavily polluting enterprises

This study utilizes comprehensive data from Chinese listed companies covering the period from 2014 to 2018 to analyze the impact of air pollution on green mergers and acquisitions (M&As) of heavily polluting enterprises (HPEs). Our findings indicate that air pollution significantly promotes green M&As of HPEs. The robustness of our results is validated through various identification methods and alternative measures. Additionally, we identify government pressure on air pollution governance as a potential mechanism underlying the observed relationship. Furthermore, the incentive effect of air pollution on green M&As of HPEs is more pronounced among key-monitored enterprises, enterprises located in cities where officials have received promotions and state-owned enterprises. Moreover, air pollution also significantly enhances the financial and environmental performance of HPEs after green M&As. Overall, our study illuminates the economic consequences of air pollution, thereby contributing to the existing literature on air pollution and corporate green M&As.