Source reduction strategy or end-of-pipe solution? The impact of green merger and acquisition on environmental investment strategy of Chinese heavily polluting enterprises

No consensus has been reached on whether green merger and acquisition (GMA) contributes to corporate green transition. Source reduction strategies are conducive to corporate green transition, while end-of-pipe solutions are not. Therefore, this paper studies the impact of GMA on corporate different environmental investment strategies using the data of Chinese heavily polluting enterprises from 2011 to 2020. It is found that GMA promotes corporate environmental investment. And enterprises are more likely to adopt source reduction strategies after GMA, which is mediated by bank loans and positively moderated by retail investor attention and information transparency. The above positive effect is only reflected in enterprises under low media pressure or high-intensity government regulation. Moreover, GMA can further enhance green innovation through source reduction strategies. This paper provides new evidence on whether and how GMA promotes corporate green transition from a new perspective.