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Success in cross-border M&A deals: can ESG performance be a countervailing force against political risk?

Abay Mulatu & Boying Xu

Economics and Business Letters2025https://doi.org/10.17811/ebl.14.3.2025.146-155article
AJG 1
Weight
0.50

What the paper says

This paper explores how acquiring firms from emerging markets can mitigate political-risk concerns from host countries in Cross-Border Mergers & Acquisitions (CBM&As) deals by leveraging their Environmental, Social, and Governance (ESG) practices. Utilizing data from Chinese CBM&As activities from 2010 to 2018, we find that while relative political risk concerns deter deal completion rate, higher ESG standards of acquirer firms reduce this deterrence effect. The results remain robust to considering ‘duration of deal completion’ as an alternative variable and when splitting the target sample countries into developed and emerging economies. The key conclusion is that emerging market multinational companies can effectively employ ESG as a strategic tool for internationalisation, enabling them to overcome some of the inherent ‘liabilities of origin’.

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https://doi.org/https://doi.org/10.17811/ebl.14.3.2025.146-155

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@article{abay2025,
  title        = {{Success in cross-border M&A deals: can ESG performance be a countervailing force against political risk?}},
  author       = {Abay Mulatu & Boying Xu},
  journal      = {Economics and Business Letters},
  year         = {2025},
  doi          = {https://doi.org/https://doi.org/10.17811/ebl.14.3.2025.146-155},
}

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Evidence weight

0.50

Balanced mode · F 0.40 / M 0.15 / V 0.05 / R 0.40

F · citation impact0.50 × 0.4 = 0.20
M · momentum0.50 × 0.15 = 0.07
V · venue signal0.50 × 0.05 = 0.03
R · text relevance †0.50 × 0.4 = 0.20

† Text relevance is estimated at 0.50 on the detail page — for your query’s actual relevance score, open this paper from a search result.