Environmental Commitments in M&A Announcements and Market Performance: Evidence from China

Environmental commitments disclosed in merger and acquisition (M&A) announcements have become an important channel through which firms signal their green governance intentions. However, systematic empirical evidence remains limited regarding whether and how capital markets respond to such commitments. Using a sample of M&A events involving Chinese A-share listed firms from 2010 to 2023, this study develops a multidimensional framework to measure environmental commitment quality and examines its association with market performance while exploring potential channels through which capital markets respond to such disclosures. The results show that: (1) high-quality environmental commitments are associated with significant short-term and long-term abnormal returns, suggesting that investors respond positively to such disclosures. (2) Increased public attention and enhanced green innovation emerge as key channels linking environmental commitments to market performance. (3) More importantly, firms issuing high-quality commitments subsequently exhibit improvements in long-term financial, environmental, market, investment, and governance performance, suggesting that these commitments may function as credible signals rather than mere “greenwashing” rhetoric. (4) These observed patterns are structurally heterogeneous and more pronounced in firms with abundant resource endowments and stronger executive environmental awareness. Overall, this study provides new evidence on how event-driven environmental disclosures are associated with firms’ resource acquisition processes and offers insights for policies aimed at improving disclosure regulation and guiding capital toward green transformation.