Against the backdrop of global energy transition and China’s "Dual Carbon" goals, the way in which corporate carbon risk—as a key driver of multinational strategic decision-making—jointly influences post-merger green innovation performance and financial performance through the interactive effects of host-country democracy, corruption, and income inequality remains unresolved. To address this gap, this study draws on data from Chinese cross-border mergers and acquisitions between 2018 and 2022 and employs a multiple linear regression model to empirically analyze the impact of acquirer carbon risk on green innovation performance and financial performance in cross-border M&As. Furthermore, it examines the moderating roles of host-country democracy, corruption, and income inequality. The paper also conducts multiple robustness tests to ensure the reliability of the findings. Research findings indicate that: (1) In terms of green performance, Chinese companies with higher carbon risks exhibit better green innovation performance after mergers and acquisitions. When the level of democracy in the host country is higher, this tendency is significantly enhanced, demonstrating a positive moderating effect. Conversely, when the level of corruption in the host country is higher, this tendency is significantly weakened, demonstrating a negative moderating effect. (2) In terms of financial performance, Chinese companies with higher carbon risks exhibit worse financial performance after mergers and acquisitions. When the level of democracy in the host country is higher, this tendency is significantly enhanced. When the level of corruption in the host country is higher, this tendency is significantly weakened. When the level of income inequality in the host country is higher, this tendency is also significantly weakened. This study aims to construct an integrated analytical framework to explain how emerging market enterprises can achieve "green escape" by adopting international non-market strategies in response to institutional pressures from host countries, thereby deepening the theoretical understanding of the motivations behind global green mergers and acquisitions.