Climate policy uncertainty and corporate mergers and acquisitions

The impact of economic policy uncertainty (EPU) on corporate mergers and acquisitions (M&A) has been well documented in the literature. However, as climate risks intensify - particularly the growing influence of transition risks - how climate policy uncertainty (CPU) affects corporate M&A has emerged as a critical yet understudied research question. This article compiles data from Chinese listed companies from 2007 to 2023 and examines the impact of corporate mergers and acquisitions (M&A) on corporate performance. The results show that CPU will inhibit corporate M&A. CPU has a greater effect on corporate M&A in low-competitive industries, non-state-owned enterprises, low-energy-consuming enterprises, high-financing-constrained enterprises, and high-climate-physical-risks enterprises. Further analysis reveals that after the introduction of the Paris Agreement, the CPU has a greater impact on corporate M&A; The CPU has also affected corporate M&A performance.