IDEAS home Printed from https://ideas.repec.org/a/wly/corsem/v31y2024i6p6167-6183.html
   My bibliography  Save this article

Does firm‐level exposure to climate change influence inward foreign direct investment? Revealing the moderating role of ESG performance

Author

Listed:
  • Lingli Qing
  • Abd Alwahed Dagestani
  • Eun‐Young Nam
  • Chengqi Wang

Abstract

The impact of climate change on foreign direct investment (FDI) at the corporate level is insufficiently explored, despite extensive discussions on environmental protection. This research utilizes novel panel data (2009–2022) on Chinese A‐share listed firms, using a two‐way fixed‐effect estimator to probe whether and how a firm's exposure to climate change influences the inflow of FDI, while considering the moderating role of environmental, social, and governance (ESG). The results show: (i) firm‐level exposure to climate change harms inward FDI inflow; (ii) host country firms can mitigate the negative effect of exposure to climate change on inward FDI inflow by strengthening their ESG performance; (iii) exposure to climate change primarily impacts FDI inflow through environmental taxes and green investments; (iv) the detrimental effect of climate change risk on incoming FDI is more pronounced in the central and eastern region of China, and among non‐state‐owned firms. These findings provide insightful theoretical and practical implications for addressing SDG 13 (Climate Action) challenges and for attracting multinational investments in developing countries like China.

Suggested Citation

  • Lingli Qing & Abd Alwahed Dagestani & Eun‐Young Nam & Chengqi Wang, 2024. "Does firm‐level exposure to climate change influence inward foreign direct investment? Revealing the moderating role of ESG performance," Corporate Social Responsibility and Environmental Management, John Wiley & Sons, vol. 31(6), pages 6167-6183, November.
    • Handle: RePEc:wly:corsem:v:31:y:2024:i:6:p:6167-6183
    DOI: 10.1002/csr.2917
    as

    Download full text from publisher

    File URL: https://doi.org/10.1002/csr.2917
    Download Restriction: no
    File URL: https://libkey.io/10.1002/csr.2917?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:wly:corsem:v:31:y:2024:i:6:p:6167-6183. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Wiley Content Delivery (email available below). General contact details of provider: https://doi.org/10.1002/(ISSN)1535-3966 .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.