Can executives’ overseas backgrounds enhance ESG performance?—empirical evidence from the construction engineering industry

Environmental, Social, and Governance (ESG) factors are crucial for sustainable development and high-quality growth in capital markets, especially for construction engineering firms that face significant environmental risks. This study investigates the impact of executives’ overseas backgrounds on corporate ESG performance using data from publicly listed construction engineering firms in China from 2010 to 2023. The research hypothesizes that executives with overseas backgrounds can enhance ESG performance through improved governance and increased environmental investments, and examines the moderating effects of external governance mechanisms such as institutional investor attention and media coverage. Results show that executives with overseas backgrounds significantly improve ESG performance by mitigating agency problems and boosting environmental investments. Both institutional investor attention and media coverage positively moderate this relationship. Heterogeneity analysis indicates that the positive impact is more pronounced in state-owned enterprises, high-pollution firms, and companies in market-oriented environments. This study contributes to the literature on executive backgrounds and ESG performance by providing empirical evidence that overseas backgrounds can enhance ESG performance in construction firms. The findings highlight the importance of external governance mechanisms and offer insights for improving ESG governance frameworks to promote high-quality development in the construction industry in China.