Research on ESG performance and OFDI willingness: Based on the fusion of financing constraints and productivity...

This paper constructs a theoretical model on how ESG performance affects enterprise's Outward Foreign Direct Investment (OFDI) intention from the perspective of integrating financing constraints and productivity thresholds, and uses data from Chinese A-share listed companies for empirical testing. The findings indicate a positive correlation between ESG performance and the willingness of corporations to OFDI. Furthermore, the heterogeneity analysis reveals that the impact of ESG performance on OFDI is more significant for enterprises with a high degree of digital transformation, containing foreign equity, operating in industries. The study concludes that better ESG performance bolsters corporate OFDI willingness through two distinct mechanisms. These mechanisms include alleviating financing constraints and lowering the productivity threshold. Additionally, better ESG performance not only increases the scale of OFDI but also fosters the binary marginal expansion of OFDI. This paper offers several solutions for enterprises seeking to expand their global reach, focusing on leveraging their ESG performance. It also provides policy recommendations for government departments seeking to optimize the ESG rating system and OFDI regulatory service system.