Cross-Border Impact of the ESG Disclosure Mandate: Evidence from Foreign Government Procurement Contracts
Kim, Yongtae, Sun, Chengzhu, Xiang, Yi, Zeng, Cheng
The Accounting Review · 2026 · Volume 101 · Issue 4
Abstract
This study examines whether and how mandating environmental, social, and governance (ESG) disclosure affects firms’ competitiveness for foreign government procurement contracts. Exploiting staggered enactment of ESG disclosure mandates across countries, we find that firms attain more and larger contracts from foreign governments after their home countries mandate ESG disclosure. We show that the ESG disclosure mandate affects the global allocation of government procurements through two channels: increased transparency of ESG information and enhanced ESG performance. The mandate’s effect is more pronounced when government customers are more conscious of ESG, when the procurement process has ESG-related requirements, when government customers have a larger pool of potential suppliers, when the mandate is more strictly enforced, and when bidders significantly improve their ESG transparency following the mandate. Overall, our findings provide novel insight into the cross-border impact of mandatory ESG disclosure. Data Availability:Data used in this study are available from public sources identified in the paper. JEL Classifications:G14; G15; K22; M14; M41; M48.
Keywords
government procurement contracts, ESG, mandatory disclosure, transparency, global market
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