The Impact of Cross-Border Mergers and Acquisitions on ESG Rating Divergence

Using A-share listed companies as the research sample, this study employs a difference-in-differences (DID) model to examine the impact of cross-border mergers and acquisitions (M&As) on ESG rating divergence. The findings show that cross-border M&As significantly exacerbate ESG rating divergence. Mechanism analyses further reveal that this effect operates through two main channels: a decline in information disclosure quality and an increase in analyst coverage. The moderating effect analysis indicates that digital transformation and executives with overseas experience can effectively mitigate this amplifying effect. Heterogeneity analysis shows that the effect is more pronounced among non-state-owned enterprises, manufacturing firms, and firms facing high financing constraints. Further analysis demonstrates that ESG rating divergence significantly reduces institutional ownership and increases the cost of equity capital. This study extends the literature on the economic consequences of cross-border M&As and provides empirical evidence for firms seeking to optimize ESG information disclosure strategies in the context of multinational operations.