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Can board ESG oversight promote corporate international expansion? Evidence from Chinese manufacturing firms

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  • Cao, Qilin
  • Li, Muxing
  • Wang, Wenke
  • Wu, Xiaoke

Abstract

China's Company Law amendment emphasizes boards' fiduciary responsibilities and mandates corporate social responsibility, thereby positioning boards as the primary entities responsible for corporate ESG governance and establishing their oversight obligations. Utilizing data from Chinese A-share listed manufacturing companies between 2012 and 2023, this paper employs the entropy weighting method to construct an indicator system for measuring board ESG oversight. Based on this system, the empirical analysis reveals that robust board ESG oversight significantly facilitates corporate international expansion. The mitigation of financing constraints and the enhancement of supply chain resilience are identified as key mediating channels. Furthermore, green technology innovation, media attention, and government subsidies are found to exert significant positive moderating effects on the relationship. Heterogeneity analysis indicates that the aforementioned facilitating effect is more pronounced in non-state-owned enterprises, firms in regions with better legal environments, and those in provinces designated under the Belt and Road Initiative. Additionally, significant changes in this promoting effect were observed around the amendment of the Company Law and the onset of the Sino-US trade friction. This study provides important evidence for understanding the theoretical implications of board ESG oversight and its role in promoting corporate international expansion, while also yielding key insights for the enhancement of board governance and ESG practices.

Suggested Citation

  • Cao, Qilin & Li, Muxing & Wang, Wenke & Wu, Xiaoke, 2026. "Can board ESG oversight promote corporate international expansion? Evidence from Chinese manufacturing firms," China Economic Review, Elsevier, vol. 95(C).
    • Handle: RePEc:eee:chieco:v:95:y:2026:i:c:s1043951x25002974
    DOI: 10.1016/j.chieco.2025.102639
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