The Influence of Internal Governance and External Legitimacy on Greenwashing: A Digitalization Perspective

Kesen Zhang (), Bilal Ahmed (), Ruping Wang () and Baoying Gu ()
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Kesen Zhang: Nantong University
Bilal Ahmed: Nantong University
Ruping Wang: Nanjing Normal University
Baoying Gu: Nantong University

Environment, Development and Sustainability: A Multidisciplinary Approach to the Theory and Practice of Sustainable Development, 2025, vol. 27, issue 2, No 86, 4909 pages

Abstract: Abstract This research aims to address the gap in existing literature regarding the relationship between digitalization and greenwashing. Drawing upon legitimacy theory, corporate governance theory, and resource-based theory, this paper constructs a theoretical framework to examine the impact of digitalization on greenwashing. It also investigates how environmental regulation, media attention, redundant resources, and equity concentration influence this relationship. The paper primarily employs the moderating and mediating effect models to test the theoretical framework and hypotheses presented herein. The study reveals the following findings: (1) There exists a negative correlation between digitalization (DF) and greenwashing. (2) Environmental regulation pressure negatively moderates this relationship, while media attention positively moderates it. (3) Ownership concentration partially mediates the effect, enhancing the inhibitory impact of DF on greenwashing, whereas resource slack weakens this inhibitory effect. Governments should enhance relevant rules and regulations to prevent companies from opting for strategic information disclosure for short-term gains. This, in turn, will preserve the role of digitalization in promoting green transformation. Enterprises should make informed decisions about their digital transformation and upgrading strategies while optimizing their capital structure through their development capabilities. Enterprises should reference peer companies with similar situations, act judiciously, avoid blindly following trends, and refrain from exaggerating information disclosure, as such practices can adversely affect their long-term development.

Keywords: Digitization; Greenwashing; Legitimacy theory; Resource slack (search for similar items in EconPapers)
Date: 2025
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DOI: 10.1007/s10668-023-04105-z

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