Digital Transformation, Internationalisation and ESG Performance of Multinational Companies

Abstract

ABSTRACT This study examines the impact and mechanism of digital transformation on the corporate environmental, social and governance (ESG) performance of Chinese A‐share listed multinational companies (MNCs) from 2011 to 2021. Corporate digital transformation can enhance ESG performance by reducing institutional distance, improving internal control quality and absorptive capacity. The level of internationalisation also has a positive impact on this relationship. The positive effect of digital transformation on the ESG performance of MNCs is more pronounced in non–high‐tech industries and mature companies. This study offers theoretical support for improving MNCs' ESG performance and managing cross‐border operational risks through digital transformation.