How does digital transformation and Global Innovation Network Embedding affect ESG performance of multinational enterprises? Empirical evidence from an Eastern innovation pattern

As an important manifestation of data-driven technological innovation paradigms, digital transformation has become a key pathway through which multinational enterprises reshape their innovation processes, enhance global competitiveness, and achieve sustainable value creation. It not only transforms firms’ modes of knowledge creation, organizational coordination mechanisms, and resource allocation logic, but also creates new opportunities for multinational enterprises to deepen their global innovation network embedding and improve ESG performance. However, existing studies have rarely systematically explored the impact mechanism of digital transformation on ESG performance from the perspective of global innovation network embedding. Grounded in the resource-based theory and social network theory, using panel data of Chinese A-share listed multinational enterprises from 2010 to 2022, the impact and mechanism of digital transformation on ESG performance in multinational enterprises were empirically analyzed by employing the two-way fixed effects model, the mediation effect model and the moderation effect model. Results indicate that, (1) Digital transformation has a significantly positive effect on the ESG performance. (2) The mechanism through which digital transformation enhances ESG performance lies in accelerating the global innovation network embedding of multinational enterprises. (3) Internal control quality strengthens the positive effect of digital transformation on ESG performance, whereas external environmental uncertainty weakens this effect. (4) The digital transformation has a stronger incentive effect on ESG performance for large-scale, manufacturing, and technology and labor-intensive multinational enterprises. The obtained conclusions contribute to fully leveraging the driving effect of digital transformation by multinational enterprises in the global value chain and provide empirical evidence that such firms can enhance their global collaborative innovation capability and sustainable competitive advantage through digital transformation.