How Does Environmental Regulation Affect Corporate Environmental, Social, and Governance (ESG) Greenwashing? Evidence from China

Bitao Yin, Zongting Li (), Zhiqiao Xiong and Daqian Shi
Additional contact information
Bitao Yin: School of Economics, Wuhan University of Technology, Wuhan 430070, China
Zongting Li: School of Economics, Wuhan University of Technology, Wuhan 430070, China
Zhiqiao Xiong: School of Economics and Management, Changsha University of Science and Technology, Changsha 410076, China
Daqian Shi: School of Economics, Wuhan University of Technology, Wuhan 430070, China

Sustainability, 2024, vol. 16, issue 23, 1-17

Abstract: This study investigated the impact of China’s new environmental protection law on the greenwashing of A-share listed companies. By employing the difference-in-differences (DID) method, this study reveals that the EPL exerts a significant inhibitory effect on corporate greenwashing behavior. To ensure the robustness of the results, several tests are conducted, including parallel trend tests, placebo tests, and propensity score matching DID (PSM-DID), all of which confirm the reliability of the findings. This paper explores the influence mechanism of the EPL through constructing the institutional deterrence mechanism, cost effect mechanism, and financing constraint mechanism. It is found that the EPL has a more significant inhibitory effect on economically developed regions, non-high-tech industries, and non-state-owned enterprises. Finally, specific policy recommendations are put forward from macro and micro perspectives.

Keywords: environmental regulation; new EPL; greenwashing; ESG; environmental economics; financing constraints; China (search for similar items in EconPapers)
JEL-codes: O13 Q Q0 Q2 Q3 Q5 Q56 (search for similar items in EconPapers)
Date: 2024
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
https://www.mdpi.com/2071-1050/16/23/10608/pdf (application/pdf)
https://www.mdpi.com/2071-1050/16/23/10608/ (text/html)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:gam:jsusta:v:16:y:2024:i:23:p:10608-:d:1535983

Access Statistics for this article

Sustainability is currently edited by Ms. Alexandra Wu

More articles in Sustainability from MDPI
Bibliographic data for series maintained by MDPI Indexing Manager ().