The Impact of Foreign Mergers and Acquisitions on ESG Performance of Chinese Listed Companies: Empirical Analysis Based on the PSM-DID Method

Abstract

In recent years, green finance has led to increased focus on ESG performance, measuring corporate social responsibility. Meanwhile, mergers and acquisitions (M&A) play a crucial role in international capital flow, which have attracted widespread attention. Exploring the impact of foreign M&A on ESG performance of companies has become an important research topic. Based on the sample of foreign mergers and acquisitions of Chinese listed companies from 2017 to 2022, this paper innovatively examines the impact and mechanism of foreign M&A on Chinese listed companies' ESG performance using propensity score matching and multi-period difference-in-differences methods. Findings indicate: (1) Foreign M&A significantly improves corporate ESG performance; (2) The impact of foreign M&A varies across different types of enterprises. Regarding the acquiring companies, foreign companies have a greater impact on improving ESG performance compared to companies from Hong Kong, Macau, and Taiwan. On the target companies' side, large-scale companies are more effective in utilizing the opportunities provided by mergers and acquisitions (M&A) to leverage their advantages. (3) Foreign M&A is particularly effective in enhancing environmental indicators within the ESG framework; (4) The mechanism behind this improvement involves a significant green culture effect, which promotes the improvement of ESG performance by amplifying the influence of corporate green culture.