A Study on the Impact of Target's ESG Performance on Acquirer's Enterprise Value
From a perspective of value chain competition and cooperation,this paper constructs a multi-period DID model and examines the impact of ESG performance of the acquisition target on the enterprise value of the acquiring company,as well as its mechanisms,based on M&A and financial data of A-share listed companies in the Shanghai and Shenzhen Stock Markets from 2010 to 2021.Research findings reveal that the acquisition of enterprises with ESG ratings will enhance the value-creation effect through competitive and cooperative competition in the value chain,as well as the reputation premium effect,thus promoting the value improvement of the acquiring enterprise;and the greater the target's ESG rating,the more significant the value enhancement for the acquiring enterprise.Following the replacement of the explanatory variable,the adjustment of sample intervals,the handling of heteroscedasticity effects,and the exclusion of other policy confounders,the results remain robust.Mechanism-based evaluations reveal that both competitive and collaborative mechanisms play significant roles in practice.By leveraging these mechanisms,target companies'ESG performance can effectively enhance the value of acquiring firms.To further enhance the ESG performance of the target company as an incentive for value enhancement in the acquisition,both parties should practice ESG disclosure,enhancing the efficiency of green acquisitions.The acquiring party should adapt to industry competition trends,accelerating its digital transformation pace.Regulatory bodies and rating agencies should strengthen supportive regulation to promote capital's green development in a regulated manner.
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