Digital transformation of enterprises and greenwashing behavior: evidence from China

Huilian Li and Yang Zhong

Finance Research Letters, 2025, vol. 82, issue C

Abstract: This study examines the impact of digital transformation on enterprise greenwashing behavior using data from Chinese-listed firms from 2011 to 2022. Our findings indicate that digital transformation significantly mitigates greenwashing, primarily by improving the information environment and enhancing internal control quality rather than alleviating financing constraints. Further heterogeneity tests show that this effect is more prominent in state-owned enterprises (SOEs), firms in western regions, highly marketized areas, and non-heavily polluting industries. Additionally, digital transformation mainly reduces greenwashing in environmental (E) and social (S) aspects, rather than governance (G). This study enriches the literature on the economic consequences of digital transformation (DT) and provides valuable insights into curbing greenwashing from the perspective of publicly listed firms.

Keywords: Digital transformation; Greenwashing; Internal control; Information environment (search for similar items in EconPapers)
Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:eee:finlet:v:82:y:2025:i:c:s154461232500844x

DOI: 10.1016/j.frl.2025.107585

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