Research Design & Data
Methodology, data sources, sample construction, and statistical framework
Research Question
Does pre-acquisition ESG performance, as measured by HIP Investor ratings, predict post-acquisition cumulative abnormal returns for Chinese firms undergoing M&A activity between 2016 and 2026?
Sample
754 firms
Period
2016-2026
Market
China A-shares
Variables
106 HIP
Sample Selection
754 Chinese publicly traded firms with HIP ratings measured in 2022, sourced from HIP Investor Inc.'s proprietary rating database. All firms are listed on Chinese stock exchanges (Shanghai/Shenzhen) and categorized into terciles based on HIP score.
HIP Tercile Groups
High HIP
Mean rating: 0.4132
Range: [0.3393, 0.5834]
Medium HIP
Mean rating: 0.2890
Range: [0.2506, 0.3378]
Low HIP
Mean rating: 0.2120
Range: [0.1098, 0.2504]
Why Chinese Firms?
- China represents the world's second-largest economy with a rapidly evolving ESG landscape
- Chinese A-share listed companies provide deep, liquid markets for rigorous analysis
- HIP Investor's coverage of 754 firms provides sufficient statistical power for tercile comparisons
- Focus on publicly traded firms ensures data transparency and return verifiability
- Sample captures diverse industries and sizes, enabling broad generalization within the Chinese market
Data Sources
HIP Investor Inc.
ESG RatingsProprietary ESG ratings across 106 variables, organized into 5 pillars (Health, Wealth, Earth, Equality, Trust), plus 48 sub-indicators selected for regression analysis.
FactSet
Financial DataAnnual stock returns (2016-2026), M&A transaction data (315 transactions across 14 firms, 202 as buyer, 113 as seller).
CSI 300 Index
Market BenchmarkMarket benchmark for calculating abnormal returns using the market model.
Time Period: 2016-2026 (11 Years)
Annual Returns
11 annual return observations per firm (2016, 2017, 2018, 2019, 2020, 2021, 2022, 2023, 2024, 2025, 2026)
HIP Ratings
HIP ratings snapshot from 2022 used as cross-sectional predictor
M&A Events
M&A events identified by first acquisition date per firm
Event Window
[-12, +12] months around M&A announcement
M&A Subsample
Firms with M&A
14
Total Transactions
315
As Buyer
202
As Seller
113
- 14 firms with M&A activity identified from FactSet Deal Summary
- 315 total transactions: 202 as buyer, 113 as seller
- Analysis focuses on buyer deals using first acquisition as event year
- Pre- and post-event Cumulative Abnormal Returns (CAR) computed using market model
Citation
Lisowski, L. (2026). "Human Impact + Profit Scores and Post-Acquisition Performance: Evidence from 754 Chinese Firms." Rollins College, International Business, concentration in Finance. Professor Marc Sardy.