Acquire or Not? Does Corporate Carbon Performance Matter?

This study investigates whether corporate carbon performance matters to initiate mergers and acquisitions (M&As) to cope with climate change, based on the global 15,000 companies’ environmental research and development (R&D) investment, greenhouse gas (GHG) emissions performances, and M&A deals, in the period from 2000 to 2021. We find that corporate environmental R&D and GHG emissions performance encourage companies to initiate M&As, based on a baseline model of analysing market power, industry wave, managemental hubris, and controlling by firm characteristics. We also find that investment in environmental R&D can reduce corporate GHG emissions with a sustainable and gradual growth effect, and this effect even reduces the likelihood that companies initiate M&As due to GHG emissions performance. Overall, the findings provide a sustainable global-scale M&A pattern strategy, based on climate change