Effective environmental strategy or illusory tactics? Corporate greenwashing and innovation willingness

Jintao Lu, Dan Rong, Gabriel Eweje, Xiaolin Yuan, Malin Song and Cory Searcy

Business Strategy and the Environment, 2025, vol. 34, issue 1, 1338-1356

Abstract: Corporate greenwashing is an unethical environmental strategy that has received extensive attention from practitioners and academics; however, little is known about its influence on innovation willingness. The purpose of this study is to fill this important gap by exploring the influence mechanism of corporate greenwashing on innovation willingness through underperformance duration. Drawing on resource‐based theory, Homo economicus, and performance feedback theory, this study uses data of 610 Chinese A‐share listed heavily polluting companies (3819 company‐year observations) from 2013 to 2019. The results show that there is a significant inverted U‐shaped relationship between corporate greenwashing and innovation willingness, with underperformance duration partially mediating this relationship. The findings advance our understanding of the non‐economic consequences of corporate greenwashing, enrich the literature on corporate greenwashing and innovation willingness, and offer valuable insights for interdisciplinary studies between environmental strategy and corporate innovation. Practical implications provide policymakers with recommendations on how to prevent corporate greenwashing in environmental responsibility.

Date: 2025
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