Do multinational enterprises’ overseas investment activities promote their green transition performance? Evidence from Chinese listed companies

Enterprises, including multinational ones, play a crucial role in harmonizing economic growth with environmental conservation through green transition efforts. Based on a panel dataset of 1,916 publicly listed Chinese companies, this study investigates how overseas investment activities conducted by multinational enterprises (MNEs) influence their green transition performance. We find that the increase in overseas investment significantly contributes to MNEs’ transition toward greener practices, with this positive effect being particularly pronounced in greenfield investments. Mechanism analysis suggests that overseas investment benefits the green transition performance of MNEs through competitive effects, economies of scale, and profit feedback from overseas subsidiaries. Moreover, reverse technology spillovers derived from overseas investments are effective in promoting MNEs’ greening, an effect amplified when MNEs possess a higher technology absorptive capacity or operate in flexible intellectual property protection.