Climate Laws and Cross-Border Mergers and Acquisitions
With the Lunch Seminar series, the Department of Finance is bringing eminent and up-and-coming researchers from around the world to Luxembourg.
Authors
Tong Li, Dragon Yongjun Tang & Fei Xie
Abstract
Climate-related regulations have become increasingly prevalent worldwide. However, the nature of climate as a global public good makes it unclear to what extent these regulations are enforced by individual countries and whether they influence key corporate decisions. We examine the impact of climate laws on the international market for corporate control. We find that foreign acquirers are less likely to pursue targets in countries that have enacted climate laws and that deals announced shortly before the enactment of climate laws are more likely to be withdrawn. Furthermore, cross-border deals feature lower premiums and less post-merger operating performance improvement after target countries adopt climate laws. We uncover supporting evidence for three potential mechanisms through which climate regulations affect cross-border acquisitions, including impeding synergy creation, deterring carbon leakage through regulatory arbitrage, and selective enforcement.
About the speaker
Dragon Tang is a Professor of Finance and Area Head in Finance at the University of Hong Kong.
Language
English.
This is a free seminar. Registration is mandatory.
Cold lunches are provided to registered participants.
In partnership with
Supported by the Luxembourg National Research Fund (FNR) 17984041