Green merger and acquisition and green technology innovation: Stimulating quantity or quality?

An increasing number of heavy pollution enterprises are enthusiastically involved in green merger and acquisition (GMA), but the impact on green technology innovation (eco-innovation) has yet to be explored. Does it stimulate the quantity or quality of eco-innovation? By manually collecting GMA engagements of China's heavy pollution enterprises from 2010 to 2020, this study employed the staggered DID method to explore this issue. The empirical results show that: (1) GMA significantly improves the quantity rather than the quality of eco-innovation. After a battery of robustness checks, such as the parallel trend test, placebo test, substitution variables, and an adjusted sample interval, the conclusion remains valid. (2) Through analyzing the motivation of GMA, we find that the desire to obtain government green innovation subsidies and enjoy tax preferences prevails, which results in the scale and quality of GMA tending to be smaller and worse, respectively. (3) Moreover, the decline in the quality of environmental disclosure and CSR provides further evidence that the quality of eco-innovation did not improve. Briefly, this study enriches theoretical grounding regarding strategies of GMA in heavy pollution enterprises and provides implications for governments in emerging economies to guide enterprises to sincerely promote both the quantity and quality of eco-innovation via GMA deals.