Speculative culture and corporate greenwashing: Evidence from China

Jianye Wang, Yubing Ke, Lingxia Sun and Huifen Liu

International Review of Financial Analysis, 2024, vol. 95, issue PB

Abstract: As culture plays an important role in corporate decisions, this paper examines whether and how the culture of speculation affects corporate greenwashing. Using data of China's A-share listed companies over the period of 2010–2022 and data of provincial lottery sales as a proxy for speculative culture, we find that regional speculative culture positively affects corporate greenwashing. The effect is more pronounced among state-owned firms, firms with high managerial overconfidence and weak corporate governance, and firms located in low-level marketization and poor legal environment. Further, mechanism tests show that speculative culture increases cash flow volatility, agency costs, and managerial self-interest, through which corporate greenwashing is affected. This study adds to the literature on the determinants of corporate greenwashing from a perspective of informal institutions.

Keywords: Speculative culture; Corporate greenwashing; Corporate risk-taking; Agency costs; Managerial self-interest (search for similar items in EconPapers)
JEL-codes: D21 G38 M14 (search for similar items in EconPapers)
Date: 2024
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:finana:v:95:y:2024:i:pb:s105752192400379x

DOI: 10.1016/j.irfa.2024.103447

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