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Overcoming liability of origin: the effects of EM-MNEs’ ESG reporting on establishment mode choice

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  • Huang, Wenchuan
  • Hu, Yuanyuan
  • Chen, Shouming

Abstract

Drawing on institutional theory, this study posits that the environmental, social, and governance (ESG) reporting of emerging market multinational enterprises (EM-MNEs) can affect their establishment mode when entering foreign markets, specifically by mitigating the liability of origin. Analyzing a sample of publicly listed Chinese multinational enterprises (MNEs) from 2009 to 2023, we find that the quality of EM-MNEs’ ESG reports is positively related to the likelihood of selecting greenfield investment as the establishment mode. This relationship is further moderated by international experience and cross-national distances. The findings contribute to the existing literature by first clarifying how ESG reporting can shape establishment mode choice through addressing the challenges of liability of origin.

Suggested Citation

  • Huang, Wenchuan & Hu, Yuanyuan & Chen, Shouming, 2026. "Overcoming liability of origin: the effects of EM-MNEs’ ESG reporting on establishment mode choice," Journal of Business Research, Elsevier, vol. 210(C).
  • Handle: RePEc:eee:jbrese:v:210:y:2026:i:c:s0148296326001670
    DOI: 10.1016/j.jbusres.2026.116133
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