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Can ancient wisdom curb modern greenwash? CEO overconfidence and the moderating power of China's three teachings

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  • Zhang, Dian
  • Cheng, Zhichao

Abstract

As firms in emerging economies navigate increasing environmental scrutiny, understanding the behavioral and cultural determinants of corporate greenwashing is critical. Using a large panel dataset of Chinese A-share firms from 2008 to 2022 with robust endogeneity controls, we find that CEO overconfidence significantly fuels corporate greenwashing, an effect found to be statistically significant primarily in non-high-tech and non-high-pollution firms, whereas it is insignificant in their high-tech and high-pollution counterparts. Our central finding then demonstrates the contrasting moderating roles of China's traditional 'Three Teachings': Confucianism substantially mitigates this detrimental linkage, Buddhist thought intensifies the effect, while Taoism appears inert. These patterns remain robust across endogeneity controls and sensitivity analyses, underscoring the complex nexus of managerial psychology, cultural heritage, and corporate environmental decision-making in emerging economies.

Suggested Citation

  • Zhang, Dian & Cheng, Zhichao, 2025. "Can ancient wisdom curb modern greenwash? CEO overconfidence and the moderating power of China's three teachings," Finance Research Letters, Elsevier, vol. 86(PC).
    • Handle: RePEc:eee:finlet:v:86:y:2025:i:pc:s1544612325017544
    DOI: 10.1016/j.frl.2025.108500
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