Does family culture hamper corporate deceptive green behavior decision-making?

Different categories of cultural traits have acknowledged that culture matters for a multiplicity of decisions made regarding economic outcomes. In response to the increasing awareness of cultural traits and their relationship to corporate sustainable behavior, this paper focused on one specific aspect of the relevance of culture: the association of family culture to green behaviors. This paper explored the nexus between family culture, the deceptive behavior of greenwashing, and firm performance in China, which provided original evidence that family culture firms have a significantly lower likelihood in participating in deceptive green behaviors as measured by greenwashing. By collecting the listed Chinese firms during 2011 to 2021, we estimated empirical models and drew a variety of conclusions accordingly. First, family culture firms have a negative and significant impact on greenwashing behaviors, leading to a decline in deceptive green production decision-making. Second, we further provided mechanisms which hamper family firms’ greenwashing behaviors into two perspectives: financial constraint and agency cost between shareholders and family managers. We recognized that financial constraints motivate family culture firms to greenwash, whereas the low agency cost related to family culture discourages family firms from greenwashing decision-making. Third, we provide very rich dimensions in discussion of heterogeneous effects. Specifically, within the internal family culture structure heterogeneities, family managers without overseas backgrounds, no generational or descendant involvement, and high family-controlled firms are even less involved in greenwashing decision-making. Moreover, with respect to external heterogeneities, family culture in pollution-intensive industries, highly regulated environmental firms, and Confucian social culture intensive regions, can significantly reduce greenwashing behaviors.