Leading green paths: the impact of executives’ environmental backgrounds on corporate green mergers and acquisitions

Green mergers and acquisitions (M&A) represent a pivotal strategy for corporate sustainable transition. Using data from Chinese A-share listed companies (2010–2024), this study examines how executives’ environmental backgrounds shape green M&A decisions and outcomes. The results show that executives’ environmental backgrounds significantly drive companies’ green M&A activities, and the promoting effect is more significant when the executives hold greater power. Heterogeneity analysis shows that the impact of executives’ environmental backgrounds on green M&A varies contingent on firm characteristics and financing constraints. The promoting effect is more pronounced for state-owned enterprises and enterprises with a high proportion of institutional ownership, yet no significant difference is observed between heavily polluting and non-heavily polluting firms. However, the impact is statistically insignificant for enterprises facing tight external financing constraints, regardless of whether the financing channel is debt financing or equity financing. Further analysis indicates that green M&A generates short-term market reactions, boosting cumulative abnormal returns. Furthermore, this study finds that the executives’ environmental backgrounds can significantly improve enterprises’ environmental and economic performance following green M&A activities. Overall, these findings illuminate the internal governance mechanisms driving corporate green transformation.