Internationalization And Chinese Corporate Sustainability:Role Of Sustainable Development Goals,Corporate Innovation And Sector Sensitivity

Sustainability has become a hot topic in today’s business.A company’s strategy should not only focus on increasing its earnings,but also on creating long-term value for society This becomes even more important when companies enter international markets and face different stakeholders.Internationalized companies are in a complex environment and under pressure from many sides.Therefore,it is important to explore what drives the sustainability of a company.The purpose of this paper is to investigate the link between sustainability and internationalization of Chinese companies and the impact of internalization on companies’ ESG performance(environmental impact,social impact,corporate governance).In addition,the paper also investigates which factors strengthen or weaken these links,including national sustainability goals and related policies,the industry to which the firm belongs,and the firm’s degree of innovation.This study uses a longitudinal dataset of A-share firms traded on the Shanghai and Shenzhen stock exchanges(2010-2018.)The research methodology employs linear regression and causal models with a nonparametric approach(bootstrap)to correct for errors.First,the paper explores the extent to which a country’s sustainability policy affects the relationship between internationalization and corporate sustainability performance(CSP)of Chinese firms.The results show that the depth and breadth of firm internationalization are positively related to firm sustainability.The country’s sustainability policies reduce the impact of internationalization on corporate sustainability.The results indicate that the state plays an important role in sustainable economic development.As national sustainability policies are promoted,the gap in CSP values between internationalized and non-internationalized firms decreasesThe impact of internationalization on the environment,society,and corporate governance is then explored.The findings show that the depth of internationalization is positively related to the social and the environmental performance,as well as on corporate governance.The breadth of internationalization is positively related to the firm’s environmental performance and corporate governance,while the breadth of internationalization does not affect the firm’s social performance.Finally,this paper explores the moderator effect of a firm’s degree of innovation and of its sector on the relationship between its internationalization and the ESG performances(environmental,social,and corporate governance).The study shows that both have moderator effect.A firm’s internationalization has a positive effect on its corporate ESG performance,but the degree of corporate innovation,as a moderator between them,somewhat reduces the positive effect of the degree of internationalization on the ESG performances.That is,the higher a firm’s innovation degree is,the lower the impact of internationalization on that firm’s ESG compared to firms with low innovation degrees.The same is true for the industry to which a firm belongs,as the more environmentally constrained a firm is,the lower the impact of internationalization on its ESG performance.