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2471The increasing social attention towards environmental pollution and its governance has led numerous traditional industrial enterprises to pursue green transformation through green M&A. In the new stage of development, local governments are actively building a new type of cordial and clean government-business relationship to effectively address challenges associated with conventional government-business interactions. As a crucial institutional guarantee for promoting high-quality economic development in China, it is imperative to investigate whether and how the cordial and clean government-business relationship can exert a green governance effect, thereby empowering traditional industrial enterprises to engage in green M&A.
Drawing on both the entrepreneurship allocation theory and the financing constraint theory, this paper examines the impact and mechanism of the cordial and clean government-business relationship on green M&A in Chinese A-share industrial enterprises from 2012 to 2020. The results show that this relationship has a significant positive effect on green M&A, particularly for enterprises with high rent-seeking dependence and those located in regions facing greater environmental governance pressure. Mechanism testing indicates that both the cordial and clean aspects of the government-business relationship enhance the motivation and ability of enterprises to engage in green M&A by improving their attention allocation towards environmental protection and alleviating financing constraints. Furthermore, the positive impact of this relationship on green M&A is more pronounced for local M&A than interregional ones. Compared to non-green M&A, announcements regarding green M&A events elicit more significant positive short-term market responses. Economic consequence analysis suggests that green M&A driven by this relationship can improve enterprises’ environmental performance, green innovation performance, and financial performance, demonstrating a long-term synergistic effect. Finally, this paper finds that the cordial and clean government-business relationship helps to inhibit decoupling behavior in green M&A.
This paper makes the following theoretical contributions and practical implications: (1) It supplements the research on the microeconomic effect of the cordial and clean government-business relationship from the perspective of green M&A, especially the green governance effect, enriching the literature on the impact of macro institutional environments on micro-enterprises. (2) It enriches the research on factors influencing green M&A from the perspective of the interaction between politics and business, deepening the logical chain of existing research. (3) It offers a comprehensive response to and extends the existing research on the underlying motivations driving corporate green M&A. (4) It provides valuable references for improving the cordial and clean government-business relationship and promoting corporate green transformation during the 14th Five-Year Plan period, contributing to high-quality economic development.
