The Influence of Political Risk and Cross-national Distance on Overseas Enterprise Performance

Abstract

In recent years, the influence of the relationship between host country and home country on the internationalization of multinational enterprises has been a controversial topic. On this basis, past researchers have done in-depth research and discussion, but these are limited to the relationship between a single variable. For example, when studying the impact of political risk on the performance of overseas enterprises, most scholars only consider the impact of government corruption and political turmoil in host countries on the performance of overseas enterprises, without taking these factors into consideration together. This paper explores the relationship between host country political risks, cross-national distance, good ESG performance, and overseas enterprises’ performance. The objective is to explore the influence of host country political risk and cross-national distance on overseas performance and reduce negative impact through ESG. It finds that host country political risk and cross-national distance are negatively correlated with overseas enterprises performance, although this negative correlation is moderated by strong ESG performance. The results show that political risk and cross-national distance are negatively correlated with the performance of overseas enterprises. With the strengthening of good ESG performance, the negative impact of host country political risk and cross-national distance on enterprise performance will be reduced.