Abstract
At present, China is in an important period of promoting high-quality economic development. In order to promote enterprises to “go global” and realize high-quality foreign investment, China advocates enterprises to abide by the environmental protection laws and regulations of the host country and standardize their environmental protection behaviors in foreign investment cooperation. However, the impact of the host country’s environmental regulation on Chinese enterprise’s multinational investment risk preference has not been paid enough attention. This paper makes an empirical analysis on how the host country’s environmental regulation affects the enterprises’ risk preference of multinational investment (MIRP) by using the samples of A-share listed companies in China from 2010 to 2018 and emphatically examines the moderating effects of enterprise’s green technology innovation and social responsibility on the relationship between host country’s environmental regulation and enterprises’ MIRP. It is found that, on the whole, the environmental regulation of the host country will significantly promote the enterprises’ MIRP. The green technology innovation will positively moderate the impact of the environmental regulation of host country on enterprises’ MIRP, while the engagement of corporate social responsibility will inhibit this positive impact.
Highlights
Environmental regulation is an important factor that regulates enterprise’ behavior and affects their investment and management
According to the data of the World Investment Report 2020 released by the United Nations Conference on Trade and Development, the proportion of multinational investment flowing into developing economies increased from 36% in 2016 to 44.5% in 2019, and the multinational investment of Chinese enterprises showed the characteristics of being inclined to high-risk countries
The results show that green technology innovation will positively moderate the influence of host country’s environmental regulation on enterprises’ MIRP in both growth and maturity stages, while social responsibility only plays a negative role in matured enterprises
Summary
Environmental regulation is an important factor that regulates enterprise’ behavior and affects their investment and management. The strengthening of environmental regulation in the host country can change investment behavior and mode of enterprise, improve the green production efficiency, and fulfill the social responsibilities of enterprise, and effectively safeguard the ecological environment of the host country. Countries or regions with loose environmental regulation usually lag behind in governance concepts, economic development, and even social turmoil, which will lead to higher investment risks. The level of environmental regulation in the host country should play a vital role in choosing the risk level of multinational investment of enterprise. Will the host country’s environmental regulation affect the risk choice of enterprise’s multinational investment? Does the high-risk characteristics of multinational investment originate from the influence of the host country’s environmental regulation? Will the host country’s environmental regulation affect the risk choice of enterprise’s multinational investment? Does the high-risk characteristics of multinational investment originate from the influence of the host country’s environmental regulation? These questions are related to the optimization of enterprise’s multinational investment decisions and contribute to the optimization of environmental regulation in host country, so they are problems worthy of our indepth study
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