The influence of enterprise ESG performance on overseas business income - Evidence from China

Qi Tan; Huaping Ma; Fengtao Guang; Dixing Zhu

doi:10.1016/j.jenvman.2024.123790

The influence of enterprise ESG performance on overseas business income - Evidence from China

J Environ Manage. 2024 Dec 21:373:123790. doi: 10.1016/j.jenvman.2024.123790. Online ahead of print.

Authors

Qi Tan¹, Huaping Ma², Fengtao Guang³, Dixing Zhu⁴

Affiliations

¹ Business School, Beijing Normal University, Beijing, 100875, China. Electronic address: mengqitan@mail.bnu.edu.cn.
² School of Economics and Trade, Hunan University, Yuelu District, 109 Shijiachong Rd, Changsha, 410079, China. Electronic address: mhp2233@163.com.
³ Research Center of Resource and Environmental Economics, School of Economics and Management, China University of Geosciences (Wuhan), 430074, Wuhan, China. Electronic address: Guangft@126.com.
⁴ The People's Bank of China Hubei Provincial Branch, Wuhan, 430071, China. Electronic address: dear_star68@163.com.

PMID: 39709660
DOI: 10.1016/j.jenvman.2024.123790

Abstract

As an emerging information disclosure system, enterprise ESG performance holds substantial importance for the international expansion of Chinese enterprises. Nevertheless, there is a paucity of literature examining the relationship between the ESG performance of Chinese enterprises and their overseas business income. This research utilizes data from Chinese A-share listed companies spanning from 2009 to 2022 to explore the causal link between ESG performance and overseas business income. The findings reveal that superior ESG performance markedly enhances overseas business income. The primary conclusions remain robust after addressing endogeneity and performing robustness checks. The empirical results suggest that strong ESG performance can transmit non-financial information to consumers and host countries, offering a more comprehensive understanding of the enterprise's operations, reducing information barriers, and facilitating increased overseas business income. Furthermore, this paper delves into the mechanisms through which ESG performance impacts overseas business income. Specifically, ESG performance fosters overseas business income by mitigating financing constraints, circumventing operational risks, and bolstering product competitiveness. Heterogeneity analysis indicates that the positive impact of ESG performance on overseas business income is significant for low-pollution enterprises, non-state-owned enterprises, and enterprises in the growth and maturity stages. Additionally, heterogeneity analysis based on international market ESG preferences reveals that this positive effect is more pronounced in regions with higher international ESG preferences. This research enriches the understanding of how enterprise ESG performance influences business operations, offering policy implications for the international expansion of Chinese enterprises and the facilitation of domestic and international dual circulation.

Keywords: Enterprise ESG performance; Financing constraints; International expansion; Overseas business income.