ABSTRACT This paper examines the impacts of stock market internationalization on corporate ESG efforts in emerging markets. We employ a staggered difference‐in‐difference approach, focusing on the phased inclusion of Chinese firms in the MSCI Emerging Market index. The findings reveal that companies improve their ESG performance and disclosure quality after the inclusion. Notably, the effect of inclusion on firms' disclosure practices is more substantial than on their actual ESG operations. These impacts are particularly pronounced in non‐state‐owned enterprises and companies with weaker governance. Also, inclusion leads to a significant rise in foreign investment and analyst attention, indirectly improving corporate ESG engagement.
Li et al. (2026) studied this question.