The impact of carbon tax on the ESG performance of Cross Border Mergers and Acquisitions.
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2024-07-08
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en
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This thesis explores the impact of carbon tax implementation on the ESG performance of acquiring firms involved in Cross-Border Mergers and Acquisitions (CBM&A) in India, with a focus on CO2 emissions. While the carbon taxes are designed to incentivize reducing emissions, energy efficiency and promote new technologies, their effectiveness can vary based on regulatory environments and tax designs. The possibilities reduction of CO2 emissions or relocation of targets, are tested as a response to the implementation of the carbon tax. This analysis shows that a carbon tax in India did lead to the expected reduction in CO2 emissions for firms involved in CBM&A. The Difference-in-Difference model showed a significant and negative effect interaction effect, translating to the combined effect of being in the treatment group and the post treatment period has a significantly decreasing impact on the Log CO2 of 26.73%. Being in the treatment group (India) led to 52.96% higher CO2 emissions compared to being in the control group (China) before the implementation of the carbon tax. Also, the insignificant post treatment variable indicated a 10% overall decrease in CO2 emissions during the period between 2005 and 2015. The findings show that relocation takes place in India after the introduction of the tax, but this effect is insignificant.
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Faculteit der Managementwetenschappen