Internationalization and multinational corporations’ environmental performance: the role of corporate governance

Abstract

Abstract Owing to critical climate change issues, the environmental responsibility of multinational corporations (MNCs) has recently attracted considerable attention from academia. However, few studies have examined how corporate governance (CG) affects MNCs’ environmental strategies during internationalization. Therefore, informed by the Institutional and stakeholder theories, this study focuses on Fortune Global 500 MNCs and theoretically discusses and empirically tests the relationship between internationalization and MNCs’ environmental performance and the moderating effects of CG on this relationship. The results indicate that there is a positive impact of internationalization on MNCs’ environmental performance and a positive moderating effect of board independence. Moreover, additional analyses show the joint moderating effects of CG on this relationship. Our results emphasize the importance of MNCs’ environmental responsibility that focuses on global stakeholders’ demands, how board independence strengthens board attention to stakeholders’ concerns, and why the joint effects of CG enhance environmental performance. Finally, suggestions for promoting MNCs’ environmental responsibility by strengthening CG regulations targeting policymakers and MNCs are provided.