Signaling good by doing good: How does environmental corporate social responsibility affect international expansion?

Abstract

AbstractThis study investigates the mechanisms through which environmental corporate social responsibility (CSR) facilitates international expansion. It is currently believed that environmental CSR can allow firms to establish trusting relationships with external stakeholders and build competitive advantages. However, the question of whether and how environmental CSR affects export performance needs to be answered. We focus on two aspects of environmental CSR: energy conservation and emission reduction. We argue that firms with better performance in energy conservation and emission reduction are more likely to obtain international certification to pursue international expansion, as a signal of desirable attributes. By using 425 listed companies from environmentally sensitive industries between 2008 and 2012 in China, we find that a high level of energy conservation and emission reduction has a significant and indirect effect on export performance, which is mediated by their signaling behavior.