IDEAS home Printed from https://ideas.repec.org/a/eee/finlet/v75y2025ics1544612325001941.html

Allocation of decision rights in business group and the corporate greenwashing behavior

Author

Listed:
  • Li, He
  • Shi, Naiyu

Abstract

The configuration of decision-making rights within corporate groups is a critical determinant of corporate behavior. An analysis of data from listed companies in China spanning the years 2010 to 2022 reveals that a higher degree of centralization in the decision-making rights of corporate groups can significantly mitigate the occurrence of greenwashing behavior through information effect, resource effect, and governance effect. The inhibitory impact of centralized decision-making on corporate greenwashing behavior is particularly pronounced in firms characterized by limited financing capabilities and substantial pollution levels.

Suggested Citation

  • Li, He & Shi, Naiyu, 2025. "Allocation of decision rights in business group and the corporate greenwashing behavior," Finance Research Letters, Elsevier, vol. 75(C).
    • Handle: RePEc:eee:finlet:v:75:y:2025:i:c:s1544612325001941
    DOI: 10.1016/j.frl.2025.106930
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S1544612325001941
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.frl.2025.106930?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. Geoffrey C. Kiel & Kevin Hendry & Gavin J. Nicholson, 2006. "Corporate Governance Options for the Local Subsidiaries of Multinational Enterprises," Corporate Governance: An International Review, Wiley Blackwell, vol. 14(6), pages 568-576, November.
    2. Sophie Bacq & Ruth V. Aguilera, 2022. "Stakeholder Governance for Responsible Innovation: A Theory of Value Creation, Appropriation, and Distribution," Journal of Management Studies, Wiley Blackwell, vol. 59(1), pages 29-60, January.
    3. Brown, James R. & Martinsson, Gustav & Petersen, Bruce C., 2012. "Do financing constraints matter for R&D?," European Economic Review, Elsevier, vol. 56(8), pages 1512-1529.
    4. Maria Cristina Pietronudo & Gregoire Croidieu & Francesco Schiavone, 2022. "A solution looking for problems? A systematic literature review of the rationalizing influence of artificial intelligence on decision-making in innovation management," Post-Print hal-04325569, HAL.
    5. Christopher Marquis & Michael W. Toffel & Yanhua Zhou, 2016. "Scrutiny, Norms, and Selective Disclosure: A Global Study of Greenwashing," Organization Science, INFORMS, vol. 27(2), pages 483-504, April.
    6. Baldi, Francesco & Pandimiglio, Alessandro, 2022. "The role of ESG scoring and greenwashing risk in explaining the yields of green bonds: A conceptual framework and an econometric analysis," Global Finance Journal, Elsevier, vol. 52(C).
    7. Farah, Bassam & Chakravarty, Dwarka & Dau, Luis & Beamish, Paul W., 2022. "Multinational enterprise parent-subsidiary governance and survival," Journal of World Business, Elsevier, vol. 57(2).
    8. Li, Yanhong & Kou, Gang & Li, Guangxu & Peng, Yi, 2022. "Consensus reaching process in large-scale group decision making based on bounded confidence and social network," European Journal of Operational Research, Elsevier, vol. 303(2), pages 790-802.
    9. Jerry Cao & Robert Faff & Jing He & Yong Li, 2022. "Who's Greenwashing Via the Media and What are the Consequences? Evidence From China," Abacus, Accounting Foundation, University of Sydney, vol. 58(4), pages 759-786, December.
    10. John Richard Kurpierz & Ken Smith, 2020. "The greenwashing triangle: adapting tools from fraud to improve CSR reporting," Sustainability Accounting, Management and Policy Journal, Emerald Group Publishing Limited, vol. 11(6), pages 1075-1093, May.
    11. Xiang Yan & Jenny Jing Wang & Ren Fang Zhang, 2024. "Allocation of decision‐making power and labour income share in listed companies: Evidence from China," Accounting and Finance, Accounting and Finance Association of Australia and New Zealand, vol. 64(2), pages 1665-1692, June.
    12. Yongming Song & Guangxu Li & Daji Ergu & Na Liu, 2022. "An optimisation-based method to conduct consistency and consensus in group decision making under probabilistic uncertain linguistic preference relations," Journal of the Operational Research Society, Taylor & Francis Journals, vol. 73(4), pages 840-854, March.
    13. Tao Kong & RenJi Sun & Guanglin Sun & Youtao Song, 2022. "Effects of Digital Finance on Green Innovation considering Information Asymmetry: An Empirical Study Based on Chinese Listed Firms," Emerging Markets Finance and Trade, Taylor & Francis Journals, vol. 58(15), pages 4399-4411, December.
    14. Huang, Liangxiong & Ma, Minghui & Wang, Xianbin, 2022. "Clan culture and risk-taking of Chinese enterprises," China Economic Review, Elsevier, vol. 72(C).
    15. Mingqiang, Xing & Lili, Qi & Dan, Hu & Mingwei, Gao, 2024. "Management short-sighted behavior and enterprise ESG performance — Evidence from listed companies in China," Finance Research Letters, Elsevier, vol. 68(C).
    16. Pietronudo, Maria Cristina & Croidieu, Grégoire & Schiavone, Francesco, 2022. "A solution looking for problems? A systematic literature review of the rationalizing influence of artificial intelligence on decision-making in innovation management," Technological Forecasting and Social Change, Elsevier, vol. 182(C).
    17. Chung-Jen Chen & Ya-Hui Lin & Shan-Huei Wang & Ruey-Shan Guo, 2022. "Parent-subsidiary linkage: How resource commitment and resource similarity influence firm performance," Asia Pacific Journal of Management, Springer, vol. 39(2), pages 615-658, June.
    18. Zhang, Dongyang, 2024. "The pathway to curb greenwashing in sustainable growth: The role of artificial intelligence," Energy Economics, Elsevier, vol. 133(C).
    19. Rabbiosi, Larissa & Santangelo, Grazia D., 2013. "Parent company benefits from reverse knowledge transfer: The role of the liability of newness in MNEs," Journal of World Business, Elsevier, vol. 48(1), pages 160-170.
    20. Jong Min Lee, 2022. "MNCs as dispersed structures of power: Performance and management implications of power distribution in the subsidiary portfolio," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 53(1), pages 126-155, February.
    21. John Richard Kurpierz & Ken Smith, 2020. "The greenwashing triangle: adapting tools from fraud to improve CSR reporting," Sustainability Accounting, Management and Policy Journal, Emerald Group Publishing Limited, vol. 11(6), pages 1075-1093, May.
    22. Wang, Litan & You, Kefei, 2022. "The impact of political connections on corporate tax burden: Evidence from the Chinese market," Finance Research Letters, Elsevier, vol. 47(PB).
    Full references (including those not matched with items on IDEAS)

    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. Bhullar, Pritpal Singh & Joshi, Mahesh & Sharma, Sharad & Kaur, Amanpreet & Phan, Duc, 2025. "Greenwashing and ESG: Bibliometric analysis and future research agenda," Pacific-Basin Finance Journal, Elsevier, vol. 93(C).
    2. Sneideriene, Agne & Legenzova, Renata, 2025. "Greenwashing prevention in environmental, social, and governance (ESG) disclosures: A bibliometric analysis," Research in International Business and Finance, Elsevier, vol. 74(C).
    3. Song, Zenglu & Lu, Jinjing & Xu, Xinkuo, 2025. "Virtue over Deception: Confucian Culture and Corporate Greenwashing Behavior," Economic Analysis and Policy, Elsevier, vol. 86(C), pages 1569-1591.
    4. Boonlert-U-Thai, Kriengkrai & Kitiwong, Weerapong & Suttipun, Muttanachai, 2025. "Religiosity, secrecy culture, and corporate social responsibility report assurance," Journal of International Accounting, Auditing and Taxation, Elsevier, vol. 58(C).
    5. Catarina Cepêda & Albertina Paula Monteiro & Beatriz Aibar‐Guzmán, 2025. "Decoupling in Sustainability Reporting: A Systematic Literature Review," Corporate Social Responsibility and Environmental Management, John Wiley & Sons, vol. 32(3), pages 2988-3007, May.
    6. van Oorschot, Kim E. & Aas Johansen, Vilde & Lynes Thorup, Nanna & Aspen, Dina Margrethe, 2024. "Standardization cycles in sustainability reporting within the Global Reporting Initiative," European Management Journal, Elsevier, vol. 42(4), pages 492-502.
    7. Mancuso, Ilaria & Petruzzelli, Antonio Messeni & Panniello, Umberto & Frattini, Federico, 2025. "The role of explainable artificial intelligence (XAI) in innovation processes: a knowledge management perspective," Technology in Society, Elsevier, vol. 82(C).
    8. Wang, Shaofeng & Zhang, Hao, 2024. "Green entrepreneurship success in the age of generative artificial intelligence: The interplay of technology adoption, knowledge management, and government support," Technology in Society, Elsevier, vol. 79(C).
    9. Ge, Shilong & Luo, Xiaodan & Li, Yuangang & Zheng, Lanxing, 2024. "The impact of green credit policy on total factor productivity of enterprises," International Review of Economics & Finance, Elsevier, vol. 95(C).
    10. Giuseppe Maria Bifulco & Carlo Caserio & Francesca di Donato & Sara Trucco, 2025. "Does Sustainable Performance Matter for Nonfinancial Disclosure Readability? A Fog Index Analysis on Italian‐Listed Companies," Business Strategy and the Environment, Wiley Blackwell, vol. 34(5), pages 5601-5623, July.
    11. 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).
    12. Rafiq, Muhammad Umair & Saleem, Shaham & Bashir, Hafsa & Shafqat, Faiqa, 2025. "Navigating the energy crisis: Unveiling the determinants of renewable energy investment," Energy, Elsevier, vol. 332(C).
    13. Zhu Wenhui & Zhang Jiajieth & Hu Chuanxia & Dong Hanwei, 2025. "Does Digital Finance Move Together with Technology Innovation in China?," Bulletin of Monetary Economics and Banking, Bank Indonesia, vol. 28(2), pages 313-330, July.
    14. Jinhui Wu & Wullianallur Raghupathi & Viju Raghupathi, 2025. "An Exploratory Study of the Association Between Green Bond Features and ESG Performance," Sustainability, MDPI, vol. 17(5), pages 1-25, February.
    15. Xiang, Yilin & Chen, Lu & Zhang, Zhenya & Sun, Xinyu, 2024. "Does perceived greenwashing promote or inhibit ethical voice? Effects of moral disengagement and perceived competitive pressure," Journal of Business Research, Elsevier, vol. 182(C).
    16. Huang, Lei & Chin, Tachia & Papa, Armando & Pisano, Paola, 2025. "Artificial intelligence augmenting human intelligence for manufacturing firms to create green value: Towards a technology adoption perspective," Technological Forecasting and Social Change, Elsevier, vol. 213(C).
    17. Liu, Changyu & Gong, Wanrong & Dong, Guanglong & Ji, Qiang, 2024. "Regulation of environmental, social and governance disclosure greenwashing behaviors considering the risk preference of enterprises," Energy Economics, Elsevier, vol. 135(C).
    18. Fu, Tong & Qiu, Zhaoxuan & Yang, Xiangyang & Li, Zijun, 2024. "The impact of artificial intelligence on green technology cycles in China," Technological Forecasting and Social Change, Elsevier, vol. 209(C).
    19. Cheol Young Kim, 2024. "Innovation Resistance of Vulnerable Workers: Focusing on Corporate Financial Performance," SAGE Open, , vol. 14(3), pages 21582440241, August.
    20. Daniela Cicchini & Maria Luisa Cotana, 2025. "Assessing the Level of Sustainability Planning: Insights from the Automotive Sector," MANAGEMENT CONTROL, FrancoAngeli Editore, vol. 2025(1), pages 185-209.

    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:finlet:v:75:y:2025:i:c:s1544612325001941. 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.elsevier.com/locate/frl .

    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.