Does international expansion create shareholder value? Evidence from European multinational enterprises

This study examines how internationalization influences the stock market performance of multinational enterprises (MNEs) and how strategic, sustainability, and governance factors condition this relationship. Using a panel of 1,527 European MNEs over 2004–2024, the analysis employs fixed-effects, quantile regressions, PSM, and GMM to address endogeneity and ensure robustness. We find that internationalisation is positively associated with market valuation, reflecting its role in enhancing growth prospects, competitiveness, and risk diversification. The effects strengthen when firms demonstrate effective inventory management and business portfolio restructuring. ESG further amplifies these relationships, whereas ESG controversies weaken them. Governance mechanisms, particularly audit committee strength and institutional ownership, also reinforce the value of global expansion. The results hold across alternative measures and crisis periods, including the global financial crisis, COVID-19, and the Russia–Ukraine conflict. The study contributes to international business theory by identifying strategic, sustainability, and governance conditions shaping investor responses to global expansion.