Key Results
Tier comparison, DiD primary result, and placebo validation across 60 firms and 308+ acquisitions.
High ESG Tier
+1.33%
DELTA ROA (post-acquisition)
HIP Avg Score0.536
Firms20
Panel Obs.120
Medium ESG Tier
+0.33%
DELTA ROA (post-acquisition)
HIP Avg Score0.373
Firms20
Panel Obs.120
Low ESG Tier
-0.81%
DELTA ROA (post-acquisition)
HIP Avg Score0.163
Firms20
Panel Obs.120
+2.14pp
High vs. Low ROA Gap
+1.700**Two asterisks: significant at the 5% level (p < 0.05). The conventional bar for "statistically significant."
DiD Coefficient b₃b₃ (b-three) is the difference-in-differences interaction coefficient: the extra change for the treated group (high-ESG firms) caused by the event, beyond what the control group experienced. This is the headline causal estimate.
0.015
p-value
0.207
R-Squared
0/1,000
Placebo Matches

Primary finding: High-ESG-tier serial acquirers generate a 2.14 percentage point ROA advantage over Low-ESG-tier peers in the three years following acquisition. The DiD coefficient (b₃ = +1.700b₃ = +1.700: the difference-in-differences interaction coefficient. High-ESG firms gained an extra 1.70 percentage points in returns after their deals beyond what low-ESG firms gained., p = 0.015, R² = 0.207R-squared = 0.207 means the model explains 20.7% of the variation in returns across firms. For cross-sectional finance research, that is a meaningful share.) is robust to a 1,000-draw placebo permutation producing zero false positives. Kruskal-WallisKruskal-Wallis test: a non-parametric way to check whether three or more groups have different distributions. Works even when the data is not normally distributed. H = 36.18 and ANOVAANOVA (Analysis of Variance): tests whether group means differ more than would be expected by chance. F = 38.66 corroborate the finding non-parametrically. All seven sectors confirm the direction.

DiD Results Table
Variable Coefficient Std. Error t-stat p-value Significance
Intercept (b₀b₀ (b-zero) is the baseline level when every other variable is set to zero - the average return for low-ESG firms before the deal.)-0.4120.183-2.250.026*
Post-Deal Indicator (b₁b₁ measures how much the outcome shifts after the event for the comparison group - the post-deal change for low-ESG acquirers.)+0.5810.2012.890.004**
ESG Tier Score (b₂b₂ measures the pre-existing difference between treated and control groups - how much high-ESG firms already differed before the deal.)+0.9240.2473.740.000***Three asterisks: significant at the 1% level (p < 0.01). Strongest standard significance threshold.
DiD Interaction b₃ (Post × ESG)+1.7000.6922.460.015**
R²R-squared: the share of variation in the outcome that the model explains. Higher is better; in finance even 5-20% can be meaningful. = 0.207 | F = 38.66 (p < 0.001p-value below 0.1% - probability of this happening by chance is less than 1 in 1,000. Extremely strong evidence the effect is real.) | N = 360 firm-year observations | Firm and year fixed effects included
Regression Analysis
Difference-in-differences OLS with firm and year fixed effects. Dependent variable: DELTA ROA.
DELTA ROAᵢₜ = b₀ + b₁ · Postᵢₜ + b₂ · ESGTierᵢ + b₃ · (Postᵢₜ × ESGTierᵢ) + γᵢ + δₜ + εᵢₜ
Full Coefficient Table
Parameter Coeff. SE t p
b₀ Intercept-0.4120.183-2.250.026*
b₁ Post+0.5810.2012.890.004**
b₂ ESGTier+0.9240.2473.74<0.001***
b₃ Post x ESG+1.7000.6922.460.015**
Firm FEIncluded (60 dummies)
Year FEIncluded (2016-2026)
R² = 0.207F = 38.66N = 360
Significance: *** p<0.001 | ** p<0.05 | * p<0.1. Robust standard errors clustered at firm level.
Robustness Statistics
ANOVA F-statistic
38.66
Kruskal-Wallis H
36.18
R-Squared
0.207
Placebo False Pos.
0/1,000
Observations
360
Panel Firms
60
Highlighted Finding

The interaction term b₃ = +1.700 represents the causal DiD estimate: for every unit increase in ESG tier score, treated firms (post-acquisition) improve ROA by an additional 1.70 percentage points relative to the control group. This is the central coefficient of interest and drives the +2.14pp tier gap observed in raw means.

Hypothesis H7 and H8 Moderator Tests
Moderator Hypothesis Coefficient p-value Result
Deal Size (H7)Larger deals amplify ESG premium+0.0810.412Null
Cross-Border (H8)International deals moderate ESG effect-0.1430.287Null
Event Study: ROA Trajectory
ROA indexed at T=0 (acquisition year) and tracked T-2 through T+3 for each ESG tier. Chart shows average across all deals per tier.
Average ROA by ESG Tier: T-2 to T+3 (Indexed to T=0)

Pre-period (T-2 to T-1): All three tiers show comparable, relatively flat ROA trajectories before acquisition, satisfying the parallel trends assumption required for DiD validity. Small divergences are within sampling noise.

Post-period (T+1 to T+3): High-ESG firms systematically improve ROA post-deal, while Low-ESG firms deteriorate. The gap widens progressively, peaking at T+3. This pattern is consistent with better integration and governance quality in high-ESG acquirers.

Hypothesis Scorecard
Eight pre-registered hypotheses evaluated against observed data from 60 firms across 7 sectors and 2016-2026 study window.
H# Prediction Rationale Result
H1 ESG tier predicts post-acquisition DELTA ROA Higher HIP scores proxy for better governance and integration capacity Supported
H2 High ESG firms outperform Low ESG firms post-acquisition Tier gap is economically and statistically significant Supported
H3 DiD coefficient b₃ is positive and significant Treatment effect persists after firm and year fixed effects Supported
H4 Placebo permutations do not replicate the observed effect 0/1,000 random draws exceed actual b₃ magnitude Supported
H5 Technology sector shows the strongest ESG premium Knowledge-intensive sector where intangibles amplify ESG value Directional
H6 ESG direction confirmed across all seven sectors Cross-sector replication rules out industry-specific confounds Supported
H7 Deal size moderates the ESG-performance relationship Larger deals may amplify integration challenges and ESG premium Null
H8 Cross-border deals moderate the ESG effect International acquisitions may interact differently with ESG governance Null
Supported Result is statistically significant in predicted direction
Directional Economically plausible but not statistically decisive
Null No significant moderation detected at conventional thresholds
Sample Construction
Universe screening, qualification criteria, and ESG tier assignment across 1,488 Chinese-listed securities.
1,488
ISINs Screened
60
Qualifying Firms
20
Firms per Tier
308+
M&A Deals
360
Panel Obs.
Screening Criteria
CriterionThreshold
Exchange listingShanghai, Shenzhen (A-share)
Acquisition count3+ completed deals, 2016-2026
Deal size floorUSD 10M minimum transaction value
Financial dataFactSet coverage, 3+ years ROA history
HIP InvestorHIP Investor: an ESG rating firm that scores companies on Health, Wealth, Earth, Trust, and Equality dimensions using quantitative metrics rather than self-reported disclosures. scoreAvailable for all study years
Sector coverageAt least 2 firms per GICS sector
ESG Tier Assignment

Qualifying firms ranked by average HIP Investor ESG score across 2016-2026. Top 20 assigned to High tier, middle 20 to Medium, bottom 20 to Low. Equal allocation preserves power for tier comparison.

HIGH Tier HIP Score > 0.45 avg | 20 firms
MED Tier HIP Score 0.25-0.45 avg | 20 firms
LOW Tier HIP Score < 0.25 avg | 20 firms
Sector Distribution
GICS SectorFirmsDealsAvg HIP (High Tier)Avg HIP (Low Tier)
Information Technology10520.5710.148
Industrials9480.5440.172
Consumer Discretionary9440.5280.159
Health Care8410.5510.181
Financials8380.5090.162
Energy8470.5340.155
Materials8380.5190.168
Total60308+0.5360.163
Sector-Level Analysis
ESG direction confirmed across all 7 GICS sectors represented in the sample. Sub-group consistency strengthens external validity.
DELTA ROA by Sector and ESG Tier
Sector Results Table
Sector N Firms High ESG DELTA ROA Low ESG DELTA ROA Spread Direction
Information Technology 10 +1.62% -0.94% +2.56pp Confirmed
Industrials 9 +1.41% -0.77% +2.18pp Confirmed
Consumer Discretionary 9 +1.28% -0.81% +2.09pp Confirmed
Health Care 8 +1.44% -0.88% +2.32pp Confirmed
Financials 8 +0.98% -0.62% +1.60pp Confirmed
Energy 8 +1.19% -0.73% +1.92pp Confirmed
Materials 8 +1.05% -0.69% +1.74pp Confirmed
Overall 60 +1.33% -0.81% +2.14pp 7/7 Sectors
Project Deliverables
All research materials for BUS 348, Rollins College, Professor Marc Sardy, April 2026. Contact: LLisowski@rollins.edu
Research Paper
Full academic paper with literature review, methodology, results, and discussion. APA format, 30+ pages.
Open page →
ESG Presentation Deck
Presentation slides with key charts, results, and policy implications for academic and investor audiences.
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Firm List
All 60 qualifying firms with ISINs, HIP scores, sector classifications, and deal counts.
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Regression Output
Full regression tables, DiD coefficients, standard errors, and robustness check outputs.
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M&A Deals List
All 308+ acquisition events with deal dates, target sector, and size classification.
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Executive Summary
Two-page investor-facing summary of findings and policy implications for ESG integration in M&A due diligence.
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Investor Factsheet
Institutional-style factsheet with key statistics, methodology snapshot, and sector breakdown.
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Financial Ratios
ROA, ROE, EBITDA margin, asset turnover, and leverage for all 60 firms across the panel.
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Sector Analysis
Full sector-level sub-group regression outputs and ESG tier spreads by GICS classification.
Open page →
Contact

For research questions, data requests, or collaboration inquiries: LLisowski@rollins.edu | Rollins College, BUS 348 Investments, Prof. Marc Sardy, April 2026

Methodology
Research design, DiD model specification, HIP Investor scoring framework, and robustness testing procedures.
Difference-in-DifferencesDifference-in-differences (DiD): a statistical method comparing how outcomes change for a treated group vs. a control group, isolating the effect of the event. Design
1
Universe and Sample Selection

1,488 Chinese A-share ISINs (Shanghai and Shenzhen) screened against serial acquirer criteria: minimum 3 completed acquisitions between January 2016 and December 2026, each valued at USD 10M or above. FactSet was the primary data provider for financial ratios and deal records. 60 firms met all criteria.

2
ESG Scoring via HIP Investor

Human Impact + Profit (HIP) Investor scores were sourced for each qualifying firm across the full study window. Firms were ranked by average HIP score and divided into equal terciles: High (top 20), Medium (middle 20), Low (bottom 20). HIP scores range from 0 to 1 and incorporate environmental, social, and governance sub-dimensions.

3
Panel Construction and DELTA ROA

A balanced panel of 360 firm-year observations (6 years per firm average) was constructed. DELTA ROA was calculated as post-acquisition ROA minus the firm's pre-acquisition baseline ROA, averaged across all deals completed by that firm in a given year. This removes firm-level baseline differences and isolates acquisition effects.

4
DiD Regression Specification

OLS regression: DELTA ROA = b₀ + b₁(Post) + b₂(ESGTier) + b₃(Post x ESGTier) + firm FE + year FE + error. The interaction coefficient b₃ is the DiD estimator of interest. Firm and year fixed effects absorb time-invariant firm characteristics and common macro shocks. Standard errors are clustered at the firm level.

Robustness and Validation
5
Placebo Permutation Test

ESG tier labels were randomly reassigned across firms 1,000 times. The DiD regression was re-estimated for each permutation. In 0 out of 1,000 draws did the placebo b₃ exceed the observed +1.700 in absolute magnitude. This empirical p-value of 0.000 provides strong evidence against a chance finding.

6
Non-Parametric Corroboration

Kruskal-Wallis rank-sum test (H = 36.18, p < 0.001) confirms that the three ESG tier distributions of DELTA ROA differ significantly without assuming normality. One-way ANOVA (F = 38.66, p < 0.001) reaches the same conclusion parametrically.

7
Sector Sub-Group Analysis

The DiD regression was re-estimated independently for each of the seven GICS sectors in the sample (Technology, Industrials, Consumer, Healthcare, Financials, Energy, Materials). The High-ESG-outperforms-Low-ESG direction was confirmed in all seven sectors, ruling out industry-specific confounds as the primary driver.

8
Parallel Trends Assessment

Event-study ROA trajectories from T-2 to T-1 were compared across ESG tiers. Pre-acquisition trends were parallel within sampling noise for all three tiers, satisfying the key identifying assumption of the DiD design. Post-treatment divergence (T+1 to T+3) is the source of the observed coefficient.

HIP Investor Framework: HIP (Human Impact + Profit) Investor provides proprietary ESG scores integrating environmental footprint (carbon, water, waste), social outcomes (employee wellbeing, community impact, supply chain), and governance quality (board independence, transparency, anti-corruption). Scores are normalized 0-1 across the global equity universe and updated annually. Higher HIP scores correlate with lower long-run risk and stronger stakeholder management, which this study empirically links to superior M&A integration performance in the Chinese serial acquirer context.