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The Impact of Geopolitical Risks on the ESG Performance of Chinese Multinational Enterprises: The Moderating Role of Firm-Specific Advantages and Country-Specific Advantages

Wedi'i Gadw mewn:
Cyhoeddwyd yn:Sustainability vol. 17, no. 23 (2025), p. 10748-10773
Prif Awdur: Guo Zijing
Awduron Eraill: Liang Yutian, Yang, Ruilin, Zhang, Jie
Cyhoeddwyd:
MDPI AG
Pynciau:
United Nations > UN
United States > US
China
Environmental social & governance
Geopolitics
Energy industry
Sustainable development
Global economy
Carbon
Foreign investment
Trade disputes
Multinational corporations
Political risk
Globalization
Mynediad Ar-lein:Citation/Abstract
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Crynodeb:Geopolitical risk (GPR) poses a significant obstacle to the achievement of sustainable development goals, yet its nuanced impact on the environmental, social, and governance (ESG) performance of multinational enterprises (MNEs) remains insufficiently examined. This study explores the influence of GPR on ESG performance by utilizing a comprehensive dataset of 12,699 subsidiaries of Chinese MNEs. The empirical results reveal an inverted U-shaped relationship between GPR and ESG performance: at moderate levels of geopolitical risk, firms tend to proactively improve their ESG practices as a risk management strategy. However, as GPR intensifies beyond a certain threshold, this approach loses its effectiveness, leading to deteriorating ESG outcomes. Further investigation uncovers the moderating roles of firm-specific advantages (FSAs) and country-specific advantages (CSAs). Robust FSAs equip firms with a greater capacity to uphold ESG standards under rising geopolitical uncertainty, while high CSAs strengthen subsidiaries’ incentives to engage in ESG activities to buffer against external political threats. Subgroup analyses demonstrate that service-oriented MNEs, state-owned enterprises, and subsidiaries operating in high-income countries are particularly susceptible to the negative consequences of heightened GPR. By shedding light on the complex interplay between geopolitical risk and corporate sustainability, this study extends the ESG literature and provides practical implications for researchers, corporate strategists, and policymakers aiming to foster resilient and responsible global business operations.
ISSN:2071-1050
DOI:10.3390/su172310748
Ffynhonnell:Publicly Available Content Database