ORIGINAL RESEARCH
Executives’ Political Influence, Green M&A
and Green Innovation: Evidence from China’s
Heavily Polluting Private Firms
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Xi’an Shiyou University, China
Submission date: 2023-09-26
Final revision date: 2023-12-25
Acceptance date: 2024-01-19
Online publication date: 2024-02-29
Publication date: 2024-05-23
Pol. J. Environ. Stud. 2024;33(4):4283-4296
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ABSTRACT
Literature on green M&A (merger and acquisition) drivers is mainly from the perspective of conforming
legitimacy, but studies based on a dual legitimacy perspective are still lacking. Our study introduces
executives’ political influence and investigates how it contributes to green M&A using the dual legitimacy
theory. Using a dataset of 409 heavily polluting private firms between 2012 and 2020, we find the conformity
and initiativeness of executives’ political influence will drive heavily polluting firms to implement green
M&A, proving its dual legitimacy. The above finding was tested under several robustness tests, such
as Tobit regression and changing measurement methods, and the endogeneity test. Further, we find
executives’ political influence is more inclined to post-merger strategic green innovation with a low “green
concentration”, and this phenomenon has positive industry and spatial spillover effects, implying that it
is mostly motivated by policy arbitrage rather than substantive upgrading. Finally, based on an external
governance perspective, we find ESG rating and media supervision play a role in debiasing between
executives’ political influence and post-merger strategic green innovation. Our study contributes to the
environmental governance function of executives’ political influence, which gives significant theoretical
significance and practical insights for the green transformation of heavily polluting private firms.