The impact of intellectual capital and ESG performance on firm internationalisation strategy: a study from the Asia-Pacific region

This research analyses the impact that intellectual capital (IC) and environmental, social, and governance (ESG) have on international sales. This is done across the Asia-Pacific (APAC) region by considering data of firms based in Australia, China, Malaysia, and Singapore. The study considers 800 firm-year data across these APAC regions between 2017 and 2023 and applies fixed effects (FEM) and random effects (REM) models to examine these relationships. This study builds on prior research highlighting the role of IC in firm performance and ESG in enhancing international competitiveness (Nguyen & Nghiem, 2023). The results indicate that the value-added intellectual coefficient (VAIC) and ESG have significant positive effects on international sales of firms. Firm size also contributes positively to international sales. However, return on assets (ROA) did not have any significant impact on global sales. Moreover, the study also found that the interaction term between VAIC and ESG is positive and statistically significant. This indicates that ESG performance amplifies the impact of IC on internationalisation. The findings of the study highlight the roles of knowledge-based resources and sustainable practices in enhancing the global operations of firms. Moreover, the study also contributes to the literature by integrating the knowledge-based, stakeholder, and institutional perspectives within a sustainability-driven internationalisation framework.

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