IDEAS home Printed from https://ideas.repec.org/a/eee/ecanpo/v86y2025icp826-838.html

Hometown CEOs and greenwashing: From the perspective of energy consumption

Author

Listed:
  • Yang, Xinhui
  • Wang, Chih-Wei
  • Zhang, Jie
  • Lin, Weizheng

Abstract

In the context of global efforts to reach the goal of carbon neutrality, reducing energy consumption, and ensuring energy security have emerged as urgent matters. For firms, the superior Environmental, Social, and Governance (ESG) performance reflects their endeavors toward the carbon neutrality goal and would confer a high green reputation upon them. However, enhancing the actual performance demands a substantial cost; some firms thus resort to "greenwashing," deceptive tactics employed by companies to appear environmentally and socially responsible to conceal their poor ESG performance, which hinders the attainment of carbon neutrality. This study examines the role of hometown CEOs in mitigating greenwashing within Chinese-listed firms. Our findings reveal that hometown CEOs effectively reduce greenwashing by enhancing disclosure practices, and this effect is more pronounced for firms with low energy consumption. This research offers actionable insights for policymakers and corporations, emphasizing the significance of leadership characteristics informed by place-based identity theories in combating greenwashing.

Suggested Citation

  • Yang, Xinhui & Wang, Chih-Wei & Zhang, Jie & Lin, Weizheng, 2025. "Hometown CEOs and greenwashing: From the perspective of energy consumption," Economic Analysis and Policy, Elsevier, vol. 86(C), pages 826-838.
    • Handle: RePEc:eee:ecanpo:v:86:y:2025:i:c:p:826-838
    DOI: 10.1016/j.eap.2025.03.054
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0313592625001274
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.eap.2025.03.054?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to

    for a different version of it.

    References listed on IDEAS

    as
    1. Ester Clementino & Richard Perkins, 2021. "How Do Companies Respond to Environmental, Social and Governance (ESG) ratings? Evidence from Italy," Journal of Business Ethics, Springer, vol. 171(2), pages 379-397, June.
    2. Pascual Berrone & Andrea Fosfuri & Liliana Gelabert, 2017. "Does Greenwashing Pay Off? Understanding the Relationship Between Environmental Actions and Environmental Legitimacy," Journal of Business Ethics, Springer, vol. 144(2), pages 363-379, August.
    3. Feng, Jingwen & Goodell, John W. & Shen, Dehua, 2022. "ESG rating and stock price crash risk: Evidence from China," Finance Research Letters, Elsevier, vol. 46(PB).
    4. Chien-Chiang Lee & Fuhao Wang & Chi-Chuan Lee, 2025. "How does education promote green digital finance? Evidence from China," Financial Innovation, Springer;Southwestern University of Finance and Economics, vol. 11(1), pages 1-29, December.
    5. Waris Ali & Jedrzej George Frynas & Zeeshan Mahmood, 2017. "Determinants of Corporate Social Responsibility (CSR) Disclosure in Developed and Developing Countries: A Literature Review," Corporate Social Responsibility and Environmental Management, John Wiley & Sons, vol. 24(4), pages 273-294, July.
    6. Alishba Hania & Chien-Chiang Lee & Farzan Yahya, 2025. "Climate anxiety, economic policy uncertainty, and green growth," Economic Change and Restructuring, Springer, vol. 58(1), pages 1-34, February.
    7. Ray Fisman & Wei Huang & Bo Ning & Yue Pan & Jiaping Qiu & Yongxiang Wang, 2023. "Superstition and Risk Taking: Evidence from “Zodiac Year” Beliefs in China," Management Science, INFORMS, vol. 69(9), pages 5174-5188, September.
    8. Peixin Li & Rongxi Zhou & Yahui Xiong, 2020. "Can ESG Performance Affect Bond Default Rate? Evidence from China," Sustainability, MDPI, vol. 12(7), pages 1-12, April.
    9. Xie, Jiayue & Chen, Lu & Liu, Yan & Wang, Shengnan, 2023. "Does fintech inhibit corporate greenwashing behavior?-Evidence from China," Finance Research Letters, Elsevier, vol. 55(PB).
    10. Li, Chen & Sensoy, Ahmet & Song, Ce & Zhang, Mi, 2023. "Does corporate green innovation behaviour impact trade credit? Evidence from China," Research in International Business and Finance, Elsevier, vol. 66(C).
    11. Wang, Shuang & Tian, Guixian, 2025. "Does renewable energy consumption reduce the energy security risk?," Energy, Elsevier, vol. 320(C).
    12. Scott E. Yonker, 2017. "Do Managers Give Hometown Labor an Edge?," The Review of Financial Studies, Society for Financial Studies, vol. 30(10), pages 3581-3604.
    13. Jiang, Feng & Qian, Yiming & Yonker, Scott E., 2019. "Hometown Biased Acquisitions," Journal of Financial and Quantitative Analysis, Cambridge University Press, vol. 54(5), pages 2017-2051, October.
    14. Subhabrata Bobby Banerjee, 2001. "Managerial perceptions of corporate environmentalism: interpretations from industry and strategic implications for organizations," Journal of Management Studies, Wiley Blackwell, vol. 38(4), pages 489-513, June.
    15. Ren, Shenggang & Cheng, Yingmei & Hu, Yucai & Yin, Chao, 2021. "Feeling right at home: Hometown CEOs and firm innovation," Journal of Corporate Finance, Elsevier, vol. 66(C).
    16. Zhang, Dongyang, 2022. "Do heterogenous subsides work differently on environmental innovation? A mechanism exploration approach," Energy Economics, Elsevier, vol. 114(C).
    17. Oh, Won-Yong & Chang, Young Kyun & Jung, Rami, 2019. "Board characteristics and corporate social responsibility: Does family involvement in management matter?," Journal of Business Research, Elsevier, vol. 103(C), pages 23-33.
    18. Wang, Qian & Wong, T.J. & Xia, Lijun, 2008. "State ownership, the institutional environment, and auditor choice: Evidence from China," Journal of Accounting and Economics, Elsevier, vol. 46(1), pages 112-134, September.
    19. Zhang, Dongyang, 2023. "Subsidy expiration and greenwashing decision: Is there a role of bankruptcy risk?," Energy Economics, Elsevier, vol. 118(C).
    20. Yang, Shoufu & Kong, Dongmin & He, Jiaqiong, 2025. "Social identity or social capital: Local CEOs and corporate ESG performance," International Review of Economics & Finance, Elsevier, vol. 98(C).
    21. Zhang, Dongyang, 2023. "Can environmental monitoring power transition curb corporate greenwashing behavior?," Journal of Economic Behavior & Organization, Elsevier, vol. 212(C), pages 199-218.
    22. Mahfuja Malik, 2015. "Value-Enhancing Capabilities of CSR: A Brief Review of Contemporary Literature," Journal of Business Ethics, Springer, vol. 127(2), pages 419-438, March.
    23. Scott E. Yonker, 2017. "Geography and the Market for CEOs," Management Science, INFORMS, vol. 63(3), pages 609-630, March.
    24. Wang, Jian & Sun, Furong & Lv, Kangjuan & Wang, Lisha, 2022. "Industrial agglomeration and firm energy intensity: How important is spatial proximity?," Energy Economics, Elsevier, vol. 112(C).
    25. E. Shvarts & A. Pakhalov & A. Knizhnikov & L. Ametistova, 2018. "Environmental rating of oil and gas companies in Russia: How assessment affects environmental transparency and performance," Business Strategy and the Environment, Wiley Blackwell, vol. 27(7), pages 1023-1038, November.
    26. Ine Paeleman & Nadja Guenster & Tom Vanacker & Ana Cristina O. Siqueira, 2024. "The Consequences of Financial Leverage: Certified B Corporations’ Advantages Compared to Common Commercial Firms," Journal of Business Ethics, Springer, vol. 189(3), pages 507-523, January.
    27. Yue, Jun & Li, Yilin, 2023. "Media attention and corporate greenwashing behavior: Evidence from China," Finance Research Letters, Elsevier, vol. 55(PB).
    28. Aaron K. Chatterji & Michael W. Toffel, 2010. "How firms respond to being rated," Strategic Management Journal, Wiley Blackwell, vol. 31(9), pages 917-945, September.
    29. Meftah Gerged, Ali & Kuzey, Cemil & Uyar, Ali & Karaman, Abdullah S., 2023. "Does investment stimulate or inhibit CSR transparency? The moderating role of CSR committee, board monitoring and CEO duality," Journal of Business Research, Elsevier, vol. 159(C).
    30. Gropper, Daniel M. & Jahera, John S. & Park, Jung Chul, 2013. "Does it help to have friends in high places? Bank stock performance and congressional committee chairmanships," Journal of Banking & Finance, Elsevier, vol. 37(6), pages 1986-1999.
    31. Jenni Dinger & Michael Conger & David Hekman & Carla Bustamante, 2020. "Somebody That I Used to Know: The Immediate and Long-Term Effects of Social Identity in Post-disaster Business Communities," Journal of Business Ethics, Springer, vol. 166(1), pages 115-141, September.
    32. Ge Ge & Xiang Xiao & Zhenzhu Li & Qinghui Dai, 2022. "Does ESG Performance Promote High-Quality Development of Enterprises in China? The Mediating Role of Innovation Input," Sustainability, MDPI, vol. 14(7), pages 1-24, March.
    33. Lee, Chien-Chiang & Yuan, Zihao & Kang, Yongchao, 2024. "Green finance and land ecological security: A potential mechanism for sustainable development," Economic Analysis and Policy, Elsevier, vol. 84(C), pages 1222-1241.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Lei, Yuyan & Peng, Yuxiang, 2025. "How does green management innovation facilitate enterprises' resource saving?," Finance Research Letters, Elsevier, vol. 84(C).

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Yang, Shoufu & Kong, Dongmin & He, Jiaqiong, 2025. "Social identity or social capital: Local CEOs and corporate ESG performance," International Review of Economics & Finance, Elsevier, vol. 98(C).
    2. Clementino, Ester & Perkins, Richard, 2020. "How do companies respond to environmental, social and governance (ESG) ratings? Evidence from Italy," LSE Research Online Documents on Economics 103046, London School of Economics and Political Science, LSE Library.
    3. Ester Clementino & Richard Perkins, 2021. "How Do Companies Respond to Environmental, Social and Governance (ESG) ratings? Evidence from Italy," Journal of Business Ethics, Springer, vol. 171(2), pages 379-397, June.
    4. Chen, Jing & Gao, Jun & Chan, Kam C. & Liu, Xinghe & Xu, Cheng, 2024. "The guardians: Do hometown CEOs curb controlling shareholders' tunneling?," International Review of Financial Analysis, Elsevier, vol. 96(PA).
    5. Zhang, Hua & Lai, Jie & Guo, Zheng, 2025. "When greenwashing meets ESG: Exploring the role of third-party ESG ratings in corporate greenwashing behavior," Journal of Business Research, Elsevier, vol. 200(C).
    6. Long, Zhineng & Xuan, Wenshuang & Zhang, Yanyu, 2023. "The dilemma of hometown identity: Evidence from Chinese corporate cost behavior," International Review of Financial Analysis, Elsevier, vol. 90(C).
    7. Lei, Zicheng & Petmezas, Dimitris & Rau, P. Raghavendra & Yang, Chen, 2025. "Local boy does good: The effect of CSR activities on firm value," Journal of Banking & Finance, Elsevier, vol. 173(C).
    8. Qian, Shuitu & Yang, Zhenyu & Fang, Xia, 2025. "Bank fintech and corporate green transformation quality improvement: based on greenwashing governance perspective," Economic Analysis and Policy, Elsevier, vol. 87(C), pages 401-423.
    9. Li, Weiping & Shi, Chang & Xiao, Zhongyi & Zhang, Xuezhi, 2024. "Bridging the green gap: How digital financial inclusion affects corporate ESG greenwashing," Finance Research Letters, Elsevier, vol. 69(PA).
    10. Zhang, Dongyang, 2023. "Does green finance really inhibit extreme hypocritical ESG risk? A greenwashing perspective exploration," Energy Economics, Elsevier, vol. 121(C).
    11. Tian Luan, 2024. "A Review of Corporate Social Responsibility Decoupling and Its Impact: Evidence from China," Sustainability, MDPI, vol. 16(10), pages 1-17, May.
    12. Wen, Liang & Yang, Jing Yu & Li, Wen Helena, 2025. "Media approval and CSP–CFP translation: the role of institutional development in an emerging market," Journal of Business Research, Elsevier, vol. 200(C).
    13. Kesen Zhang & Bilal Ahmed & Ruping Wang & Baoying Gu, 2025. "The Influence of Internal Governance and External Legitimacy on Greenwashing: A Digitalization Perspective," Environment, Development and Sustainability: A Multidisciplinary Approach to the Theory and Practice of Sustainable Development, Springer, vol. 27(2), pages 4881-4909, February.
    14. Wang, Yuxi & Hu, Fangjia & Wang, Yunyun, 2024. "Analyst coverage and greenwashing: Evidence from Chinese A-Share listed corporations," International Review of Economics & Finance, Elsevier, vol. 94(C).
    15. Zhang, Dongyang, 2023. "Can environmental monitoring power transition curb corporate greenwashing behavior?," Journal of Economic Behavior & Organization, Elsevier, vol. 212(C), pages 199-218.
    16. Xue, Kunkun & Chen, Xiaoxiao & Sun, Peipei & Li, Yongqing, 2024. "Supply chain network centrality and corporate greenwashing behavior," Finance Research Letters, Elsevier, vol. 70(C).
    17. Yin, Lei & Yang, Yuanyuan, 2024. "How does digital finance influence corporate greenwashing behavior?," International Review of Economics & Finance, Elsevier, vol. 93(PB), pages 359-373.
    18. Xu, Nianhang & Li, Min & Xie, Rongrong & Chan, Kam C., 2024. "Double standards? The adverse impact of chairperson hometown ties on corporate green innovation," Journal of Corporate Finance, Elsevier, vol. 88(C).
    19. Chen, Jing & Hong, Junjie & Zhong, Weifeng & Wang, Chengqi & Liu, Xinghe, 2024. "Doing right at home: Do hometown CEOs curb corporate misconduct?11Chengqi Wang acknowledges the financial support of National Natural Science Foundation of China (No. 72332005). Xinghe Liu acknowledges the financial support of National Social Science," Technological Forecasting and Social Change, Elsevier, vol. 205(C).
    20. Xiong, Jiacai & Yang, Zelin & Wang, Qing Sophie, 2025. "Can non-punitive regulation curb corporate greenwashing?Evidence from a word embedding model," Research in International Business and Finance, Elsevier, vol. 76(C).

    More about this item

    Keywords

    ;
    ;
    ;
    ;
    ;

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:ecanpo:v:86:y:2025:i:c:p:826-838. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.journals.elsevier.com/economic-analysis-and-policy .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.