How do ESG ratings promote the acceleration of enterprise internationalization? — Evidence from Chinese listed companies

This study aims to investigate whether differences in enterprises' Environmental, Social, and Governance (hereinafter referred to as ESG) rating levels can affect the speed of their international expansion. Using empirical data from Chinese listed companies spanning the period 2010-2023, it is confirmed that ESG ratings exert a positive impact on the acceleration of enterprises' internationalization. Specifically, ESG ratings promote an increase in the speed of enterprises' international expansion by enhancing the quality of corporate information disclosure. Further research indicates that environmental responsibility, social responsibility, and governance responsibility all exert a positive impact on the acceleration of internationalization, and also have a positive effect on the pace of internationalization. Among these dimensions, the impact of governance responsibility is the most significant. Consequently, the agency costs related to corporate governance impose a constraining effect on the promotional role of ESG ratings. Finally, among Chinese listed companies that opt for accelerated internationalization, the majority originate from the eastern region of China and the manufacturing industry. Moreover, the impact of ESG ratings on the acceleration of internationalization is more pronounced for enterprises located in the eastern region and those operating in the manufacturing sector. This study breaks through the inherent cognition that focuses solely on internal governance and external environment as factors influencing enterprises' internationalization behavior, reveals the profound impact of differences in market ESG ratings on enterprises' international expansion behavior, and deepens the understanding of how ESG ratings affect enterprises' international expansion capabilities.