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The influence of ESG on mergers and acquisitions decisions and organisational performance in UK firms: comparison between financial and non-financial sectors

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Název: The influence of ESG on mergers and acquisitions decisions and organisational performance in UK firms: comparison between financial and non-financial sectors
Autoři: Omotayo Olaleye Feyisetan, Fadi Alkaraan, Chau Le
Zdroj: Journal of Applied Accounting Research. 26:679-707
Informace o vydavateli: Emerald, 2025.
Rok vydání: 2025
Témata: M&As, environmental social and governance, N120 - International business studies, N200 - Management studies, N410 - Accountancy, N100 - Business studies, Mergers and acquisitions, financial performance, N321 - Investment, N990 - Business & administrative studies not elsewhere classified, N422 - Financial reporting, N320 - Investment & insurance, N400 - Accounting, N340 - Financial management, UK companies, N300 - Finance, ESG performances
Popis: PurposeThis paper aims to investigate the influence of environmental, social and governance (ESG) on mergers and acquisitions (M&A) decisions/activities and organisational performance in UK – financial and non-financial firms over the period (2012–2022).Design/methodology/approachThe theoretical lenses underpinning this study are rooted in stakeholder theory and resource-based theory. The empirical analysis is based on a sample of financial and non-financial firms selected from FTSE ALL-listed companies over the period (2012–2022).FindingsFindings of this study reveal that ESG score has a statistically significant impact on both financial and non-financial firms. An increase in firm ESG performance significantly increases the likelihood of M&A. The results reveal that the impact of ESG on firm financial performance is negative and significant, but this is not the case for non-financial firms where the impact despite being positive is insignificant.Research limitations/implicationsThis research was conducted using data from firms within the UK context. Future research may adopt or adapt the research questions in different context and settings. Future studies may adopt a case study approach or survey-based questionnaires or employ various theoretical lenses.Practical implicationsFindings of this study have managerial and theoretical implications. Integrating ESG into operational and strategic organisational activities enhances attractiveness to potential bidders and contributes to sustainable financial performance because acquiring targets with high ESG performance can have a positive effect on the acquirer’s post-merger market value, thereby strongly confirming the use of ESG as a value-enhancing strategy to promote corporate external growth.Originality/valueOur findings add to the extant literature, a recent empirical evidence that, to the best of our knowledge, our this study is among the first to examine the influence of ESG on M&A and firm performance through comparison between the financial and non-financial sectors.
Druh dokumentu: Article
Jazyk: English
ISSN: 1758-8855
0967-5426
DOI: 10.1108/jaar-09-2024-0340
Rights: Emerald Insight Site Policies
CC BY NC
Přístupové číslo: edsair.doi.dedup.....9247146098c5c61af5c4604a43b975f5
Databáze: OpenAIRE
Popis
Abstrakt:PurposeThis paper aims to investigate the influence of environmental, social and governance (ESG) on mergers and acquisitions (M&A) decisions/activities and organisational performance in UK – financial and non-financial firms over the period (2012–2022).Design/methodology/approachThe theoretical lenses underpinning this study are rooted in stakeholder theory and resource-based theory. The empirical analysis is based on a sample of financial and non-financial firms selected from FTSE ALL-listed companies over the period (2012–2022).FindingsFindings of this study reveal that ESG score has a statistically significant impact on both financial and non-financial firms. An increase in firm ESG performance significantly increases the likelihood of M&A. The results reveal that the impact of ESG on firm financial performance is negative and significant, but this is not the case for non-financial firms where the impact despite being positive is insignificant.Research limitations/implicationsThis research was conducted using data from firms within the UK context. Future research may adopt or adapt the research questions in different context and settings. Future studies may adopt a case study approach or survey-based questionnaires or employ various theoretical lenses.Practical implicationsFindings of this study have managerial and theoretical implications. Integrating ESG into operational and strategic organisational activities enhances attractiveness to potential bidders and contributes to sustainable financial performance because acquiring targets with high ESG performance can have a positive effect on the acquirer’s post-merger market value, thereby strongly confirming the use of ESG as a value-enhancing strategy to promote corporate external growth.Originality/valueOur findings add to the extant literature, a recent empirical evidence that, to the best of our knowledge, our this study is among the first to examine the influence of ESG on M&A and firm performance through comparison between the financial and non-financial sectors.
ISSN:17588855
09675426
DOI:10.1108/jaar-09-2024-0340