OFDI and ESG Performance of Enterprises:Based on Empirical Evidence from the Belt & Road Initiative
This study examines the impact of outward foreign direct investment(OFDI)on environ-mental,social,and governance(ESG)performance in Chinese manufacturing companies listed on the Shanghai and Shenzhen stock exchanges from 2010 to 2020.Leveraging the Belt and Road Initia-tive(BRI)as a natural experiment,the research finds that Chinese enterprises'OFDI,facilitated by the BRI,significantly boosts ESG performance,particularly emphasizing the environmental dimen-sion.The positive effects on ESG become more pronounced as OFDI progresses.OFDI is likely to enhance the ESG performance of companies with limited international experience,investing in host countries aligned with high sustainable development goals.Moreover,in the presence of stringent institutional constraints,the BRI substantially enhances ESG performance,particularly in the envi-ronmental dimension.Companies with abundant higher-order resources tend to witness a more sig-nificant impact on the social and governance dimensions of ESG,leading to the development of sus-tainable competitive advantages.This study enriches the literature on the implications of Chinese enterprises'investments in Belt and Road countries on ESG,offering theoretical backing and empiri-cal findings to advance the establishment of ESG within Chinese enterprises.
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