The Impact of Green Mergers and Acquisitions on the Market Power of Heavily Polluting Enterprises

In the era of low-carbon economy, green mergers and acquisitions (green M&As) have emerged as a pivotal strategic pathway for heavily polluting enterprises to not only carve out a competitive edge in the market but also contribute significantly to the achievement of Sustainable Development Goal 12 (SDG 12)—Responsible Consumption and Production. Based on the data of China’s heavily polluting enterprises listed on the Shanghai and Shenzhen A-share markets from 2010 to 2022, this study applies the multi-temporal difference-in-differences method to analyze the impact of green M&As on the market power of heavily polluting enterprises. The findings suggest that the adoption of green M&As by heavily polluting enterprises in China can enhance market power, and this conclusion remains valid after a series of robustness tests. The mediation effect analysis shows that green M&As promote the market power of heavily polluting enterprises by increasing green total factor productivity, optimizing human capital structure and enhancing brand capital. Meanwhile, according to the heterogeneity study conducted, the implementation of green M&As by non-state-owned heavily polluting enterprises and heavily polluting enterprises within the growth period has a more pronounced effect on market power promotion. In addition, domestic green M&As have a stronger effect on the market power of heavily polluting enterprises. By bridging the theoretical gap between green M&As and the driving mechanisms of market power, this study not only enriches the academic literature but also provides actionable insights for heavily polluting enterprises seeking to enhance their market competitiveness while adhering to sustainable development principles.