How the Proportion of International Business Influences Sustainable Management: An Empirical Study on Korean Exporters

Purpose - Although sustainable management is crucial for global supply chains, little research has been conducted on the factors influencing exporters’ sustainable management practices. Against this backdrop, we examine the relationship between the proportion of international business and the sustainable management of Korean exporters, crucial participants in the global supply chain. Design/Methodology - The sample consists of 1,746 annual records of Korean exporters showing corporate settlement in December. We use the environmental, social (S), and governance (G) evaluation indices disclosed by the Korea Institute of Corporate Governance and Sustainability to measure the sustainable management efforts of an exporter. Furthermore, we used the export-share records of an exporter in databases, including TS-2000 and FnGuide, to measure international business share. Findings -Therefore, the proportion of international business was found to have a statistically significant positive effect not on the overall ESG composite score but specifically on environmental performance. This finding suggests that the environmental domain is directly linked to global trade regulations, prompting export-oriented firms to strengthen their environmental management practices strategically. Subsequently, social and governance performances did not show statistically significant associations with the level of international business activities. Furthermore, the analysis revealed heterogeneity in ESG responsiveness depending on firm size. Notably, large firms demonstrated a positive and significant relationship between international business expansion and ESG performance in social performance. Additionally, to address potential endogeneity concerns, this study conducts supplementary analyses using changes in the proportion of international businesses and a restricted sample comprising only export-engaged firms. The core results for environmental performance remain robust across these alternative specifications. Originality/value - The results indicate that Korean exporters have responded well to changes in the global supply chain environment and international environmental regulations. The paper concludes with a discussion of the research results and provides implications for global supply chain participants.