Does Firm’s ESG performance matters for corporate export? Evidence from China

Download PDF
Abstract: Firms' ESG performance is a vital factor for sustainable development. Corporate export, as one of the most significant firm international strategies, plays a crucial role in their decision-making. This study conducts theoretical analysis and empirical tests on the relationship between firm’s ESG performance and corporate export using panel data of Chinese listed companies from 2011 to 2016. We employ the fixed effect regression model based on the panel dataset and find that firm’s ESG performance significantly positively affects corporate export. Our main findings have certain implications for enterprises in coping with sustainable development and empowering the international corporate strategy.
Keywords: Firm ESG performance; Corporate export; Chinese listed firms; Sustainable development.
APA Citation: Qihan Yang (2024). Does Firm’s ESG performance matters for corporate export? Evidence from China. Transactions on Economics, Business and Management Research, 8(1), 408-413. https://doi.org/10.62051/eak60y63

References

  1. Alareeni, B.A., Hamdan, A., 2020. ESG impact on performance of US S&P 500-listed firms. Corporate Governance: The International Journal of Business in Society 20, 1409–1428. https://doi.org/10.1108/CG-06-2020-0258
  2. Alessandria, G., Arkolakis, C., Ruhl, K.J., 2021. Firm Dynamics and Trade. Annu. Rev. Econ. 13, 253–280. https://doi.org/10.1146/annurev-economics-090919-025159
  3. Alguacil, M., Turco, A.L., Martínez-Zarzoso, I., 2022. Robot adoption and export performance: Firm-level evidence from Spain. Economic Modelling 114, 105912. https://doi.org/10.1016/j.econmod.2022.105912
  4. Arvidsson, S., Dumay, J., 2022. Corporate ESG reporting quantity, quality and performance: Where to now for environmental policy and practice? Business Strategy and the Environment 31, 1091–1110. https://doi.org/10.1002/bse.2937
  5. Bas, M., 2012. Input-trade liberalization and firm export decisions: Evidence from Argentina. Journal of Development Economics 97, 481–493. https://doi.org/10.1016/j.jdeveco.2011.05.010
  6. Bellone, F., Musso, P., Nesta, L., Schiavo, S., 2010. Financial Constraints and Firm Export Behaviour. World Economy 33, 347–373. https://doi.org/10.1111/j.1467-9701.2010.01259.x
  7. Benguria, F., Choi, J., Swenson, D.L., Xu, M. (Jimmy), 2022. Anxiety or pain? The impact of tariffs and uncertainty on Chinese firms in the trade war. Journal of International Economics 137, 103608. https://doi.org/10.1016/j.jinteco.2022.103608
  8. Bergin, P.R., Feng, L., Lin, C.-Y., 2021. Trade and firm financing. Journal of International Economics 131, 103461. https://doi.org/10.1016/j.jinteco.2021.103461
  9. Billio, M., Costola, M., Hristova, I., Latino, C., Pelizzon, L., 2021. Inside the ESG Ratings:(Dis) agreement and performance. Corporate Social Responsibility and Environmental Management 28, 1426–1445. https://doi.org/10.1002/csr.2177
  10. Calof, J.L., 1994. The Relationship Between Firm Size and Export Behavior Revisited. J Int Bus Stud 25, 367–387. https://doi.org/10.1057/palgrave.jibs.8490205
  11. Carnini Pulino, S., Ciaburri, M., Magnanelli, B.S., Nasta, L., 2022. Does ESG disclosure influence firm performance? Sustainability 14, 7595. https://doi.org/10.3390/su14137595
  12. Chen, J., Li, D., Liang, J., Sun, C., 2023. Does corporate income tax reduction prompt firm export concentration? Economic Analysis and Policy 80, 894–909. https://doi.org/10.1016/j.eap.2023.09.025
  13. Chen, Z., Poncet, S., Xiong, R., 2020. Local financial development and constraints on domestic private-firm exports: Evidence from city commercial banks in China. Journal of Comparative Economics 48, 56–75. https://doi.org/10.1016/j.jce.2019.09.005
  14. Crozet, M., Hinz, J., Stammann, A., Wanner, J., 2021. Worth the pain? Firms’ exporting behaviour to countries under sanctions. European Economic Review 134, 103683. https://doi.org/10.1016/j.euroecorev.2021.103683
  15. DasGupta, R., 2022. Financial performance shortfall, ESG controversies, and ESG performance: Evidence from firms around the world. Finance Research Letters 46, 102487. https://doi.org/10.1016/j.frl.2021.102487
  16. De Sousa, J., Disdier, A.-C., Gaigné, C., 2020. Export decision under risk. European Economic Review 121, 103342. https://doi.org/10.1016/j.euroecorev.2019.103342
  17. Ding, H., Fan, H., Lin, S., 2018. Connect to trade. Journal of International Economics 110, 50–62. https://doi.org/10.1016/j.jinteco.2017.10.004
  18. Du, J., Girma, S., 2007. Finance and Firm Export in China. Kyklos 60, 37–54. https://doi.org/10.1111/j.1467-6435.2007.00362.x
  19. Duque-Grisales, E., Aguilera-Caracuel, J., 2021. Environmental, social and governance (ESG) scores and financial performance of multilatinas: Moderating effects of geographic international diversification and financial slack. Journal of Business Ethics 168, 315–334. https://doi.org/10.1007/s10551-019-04177-w
  20. Fatemi, A., Glaum, M., Kaiser, S., 2018. ESG performance and firm value: The moderating role of disclosure. Global finance journal 38, 45–64. https://doi.org/10.1016/j.gfj.2017.03.001
  21. Gillan, S.L., Koch, A., Starks, L.T., 2021. Firms and social responsibility: A review of ESG and CSR research in corporate finance. Journal of Corporate Finance 66, 101889. https://doi.org/10.1016/j.jcorpfin.2021.101889
  22. Gupta, P., Chauhan, S., 2021. Firm capabilities and export performance of small firms: A meta-analytical review. European Management Journal 39, 558–576. https://doi.org/10.1016/j.emj.2020.12.003
  23. Handayani, M.K.Y., 2019. The effect of ESG performance on economic performance in the high profile industry in Indonesia. Journal of International Business Economics 7, 112–121.
  24. He, F., Du, H., Yu, B., 2022. Corporate ESG performance and manager misconduct: Evidence from China. International Review of Financial Analysis 82, 102201. https://doi.org/10.1016/j.irfa.2022.102201
  25. Hirsch, S., Adar, Z., 1974. Firm size and export performance. World development 2, 41–46. https://doi.org/10.1016/0305-750X(74)90046-1
  26. Huang, D.Z.X., 2021. Environmental, social and governance (ESG) activity and firm performance: a review and consolidation. Accounting & Finance 61, 335–360. https://doi.org/10.1111/acfi.12569
  27. Khan, M.A., 2022. ESG disclosure and firm performance: A bibliometric and meta analysis. Research in International Business and Finance 61, 101668. https://doi.org/10.1016/j.ribaf.2022.101668
  28. LiPuma, J.A., Newbert, S.L., Doh, J.P., 2013. The effect of institutional quality on firm export performance in emerging economies: a contingency model of firm age and size. Small Bus Econ 40, 817–841. https://doi.org/10.1007/s11187-011-9395-7
  29. Lu, Y., Xu, C., Zhu, B., Sun, Y., 2024. Digitalization transformation and ESG performance: Evidence from China. Bus Strat Env 33, 352–368. https://doi.org/10.1002/bse.3494
  30. Mervelskemper, L., Streit, D., 2017. Enhancing market valuation of ESG performance: is integrated reporting keeping its promise? Business Strategy and the Environment 26, 536–549. https://doi.org/10.1002/bse.1935
  31. Minetti, R., Zhu, S.C., 2011. Credit constraints and firm export: Microeconomic evidence from Italy. Journal of International Economics 83, 109–125. https://doi.org/10.1016/j.jinteco.2010.12.004
  32. Munch, J., Schaur, G., 2018. The effect of export promotion on firm-level performance. American Economic Journal: Economic Policy 10, 357–387. https://doi.org/10.1257/pol.20150410
  33. Nakos, G., Brouthers, K.D., Brouthers, L.E., 1998. The Impact of Firm and Managerial Characteristics on Small and Medium-Sized Greek Firms’ Export Performance. Journal of Global Marketing 11, 23–47. https://doi.org/10.1300/J042v11n04_03
  34. Rodríguez-Pose, A., Tselios, V., Winkler, D., Farole, T., 2013. Geography and the determinants of firm exports in Indonesia. World Development 44, 225–240. https://doi.org/10.1016/j.worlddev.2012.12.002
  35. Sahut, J.-M., Pasquini-Descomps, H., 2015. ESG impact on market performance of firms: International evidence. Management international 19, 40–63. https://doi.org/10.7202/1030386ar
  36. Wakelin, K., 1998. Innovation and export behaviour at the firm level. Research policy 26, 829–841. https://doi.org/10.1016/S0048-7333(97)00051-6
  37. Yoon, B., Lee, J.H., Byun, R., 2018. Does ESG performance enhance firm value? Evidence from Korea. Sustainability 10, 3635. https://doi.org/10.3390/su10103635
  38. Zhang, Y., Cui, J., Lu, C., 2020. Does environmental regulation affect firm exports? Evidence from wastewater discharge standard in China. China Economic Review 61, 101451. https://doi.org/10.1016/j.chieco.2020.101451
  39. Zhou, G., Liu, L., Luo, S., 2022. Sustainable development, ESG performance and company market value: Mediating effect of financial performance. Business Strategy and the Environment. https://doi.org/10.1002/bse.3089