A Study on the Impact of Enterprise Digital Evolution on Outward Foreign Investments

In the age of the digital economy, digital evolution has emerged as a central focus in academic research. The achievement is of paramount importance for augmenting their international investments. This research utilizes data from publicly listed manufacturing firms in China from 2010 to 2021 to examine the influence of enterprise digital evolution on outbound foreign investments. The research findings reveal that enterprise digital evolution has a significant positive impact on the outward foreign investments of enterprises and exhibits heterogeneity in terms of region, company size, and industry type. Mechanism tests reveal that the impact of enterprise digital evolution on outward foreign investments can be realized through four pathways: enhancing ESG performance, reducing debt financing costs (COD1) (representing the proportion of interest costs to the total of long and short-term debts), company age, and debt financing costs (COD2) (denoting the proportion of financial expenses to the total of long and short-term debts). In the context of digitization, enterprise digital evolution continues to hold positive significance for outward foreign investments, contributing to the enrichment of the theoretical research on the subject to a certain extent.