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The Moderating Effect of Multinationality on Environmental, Social, and Governance and Efficiency: A Strategic Analysis of Multinational Enterprises

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  • Minh‐Hieu Le
  • Wen‐Min Lu

Abstract

This study addresses the research gap in assessing multinational enterprises' (MNEs') efficiency across multiple dimensions by employing a novel chance‐constrained network data envelopment analysis. Unlike prior studies that focus on single‐dimensional efficiency, our approach evaluates operating, R&D, profitability, and sustainable efficiencies simultaneously. We find that MNEs in Asia (Europe) excel in operational and R&D efficiencies (profitability and sustainable efficiencies), while MNEs in Europe (Asia) lag behind. By integrating Michael Porter's generic strategies framework, we categorize efficiencies into four quadrants for strategic insights. Furthermore, we examine the nonlinear impact of ESG performance (ESG score and ESG combined score) on efficiency, revealing that multinationality negatively moderates the ESG–efficiency relationship. These findings provide novel insights into how ESG engagement and multinationality influence MNE performance, offering strategic guidance for firms navigating global complexities and sustainability challenges.

Suggested Citation

  • Minh‐Hieu Le & Wen‐Min Lu, 2025. "The Moderating Effect of Multinationality on Environmental, Social, and Governance and Efficiency: A Strategic Analysis of Multinational Enterprises," Business Strategy and the Environment, Wiley Blackwell, vol. 34(8), pages 10723-10740, December.
    • Handle: RePEc:bla:bstrat:v:34:y:2025:i:8:p:10723-10740
    DOI: 10.1002/bse.70126
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    References listed on IDEAS

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    1. Mona Ali Mohamed Khalil & Mohamed Abdelraouf & Tamer Shahwan, 2026. "Evaluating the effect of corporate social responsibility (CSR) on corporate financial performance” an applied study on Egyptian stock market," Future Business Journal, Springer, vol. 12(1), pages 1-18, December.

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