Propensity Score Matching and a Difference in Difference Approach to Assess ESG’s Influence on Indian Acquirer Performance

Abstract

This research involves an in-depth analysis of the intricate relationship between Environmental, Social, and Governance scores and the financial and operational performance of Indian acquirers. The research methodology employed herein entails a meticulously crafted design, incorporating a blend of the Propensity Score Matching and Difference-in-Differences model. This strategic amalgamation serves to rigorously assess the impact of ESG factors on the performance outcomes of Indian acquirers involved in M&As. The empirical findings of this study reveal a robust and statistically significant correlation between M&A endeavours and ESG considerations. Notably, the research discerns that M&A activities tend to exert an adverse influence on ESG performance metrics within the Indian corporate landscape. This nuanced insight underscores the multifaceted interplay between strategic corporate actions and the broader sustainability and governance landscape, thereby offering valuable implications for scholars and practitioners in finance and corporate strategy.

Keywords

• esg score
• mergers and acquisitions
• propensity score matching
• and difference-indifferences method