Going out by doing good: The effect of mandatory CSR disclosure on outward FDI of Chinese firms

• DOI: 10.1111/twec.13629
• Publication Date: 2024-08-23T04:45:44Z
• Authors: Yi Zhang; Wei Xue; Chun Liu
• Keywords: Endogeneity; Investment

Abstract This study examines the effect of mandatory corporate social responsibility (CSR) disclosure on outward foreign direct investment (OFDI) Chinese listed firms. We address potential endogeneity concerns by employing propensity score matching (PSM) and difference‐in‐differences (DID) methods. Our analysis reveals that firms subject to CSR exhibit a significantly higher engage in OFDI undertake greater number projects. positive is particularly pronounced for specific sub‐samples firms: highly polluting, non‐state owned, relatively large those targeting developed economies investment. Further investigation into underlying mechanisms suggests disclosing information facilitates primarily enhancing innovation capabilities, alleviating financial constraints mitigating liability foreignness.