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Ownership concentration and corporate greenwashing in China's capital markets: Based on a multi-actors perspective

Author

Listed:
  • Fan, Xinyue
  • Tang, Zishen
  • Huang, Wenjie
  • Yang, Kai

Abstract

This research employs the Word Vector Technique to construct a greenwashing index and examine a subset of Chinese A-share listed firms spanning from 2011 to 2021. The study indicates that a substantial equity stake owned by the primary largest shareholder is associated with the phenomenon of greenwashing within a company. This study also suggests that this relationship can be attributed to executives engaging in opportunistic share selling subsequent to the company's greenwashing activities. Retail investors may fail to detect companies' deceptive environmental disclosures. In contrast, external professional monitoring has the capacity to mitigate greenwashing resulting from ownership concentration. Government interventions, such as political affiliations, investigations, and fair competition assessments, have the potential to effectively mitigate firms' greenwashing practices. The primary findings exhibit consistency even following the mitigation of substantial endogeneity concerns and the completion of robustness assessments.

Suggested Citation

  • Fan, Xinyue & Tang, Zishen & Huang, Wenjie & Yang, Kai, 2025. "Ownership concentration and corporate greenwashing in China's capital markets: Based on a multi-actors perspective," Pacific-Basin Finance Journal, Elsevier, vol. 89(C).
    • Handle: RePEc:eee:pacfin:v:89:y:2025:i:c:s0927538x24003524
    DOI: 10.1016/j.pacfin.2024.102600
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    More about this item

    Keywords

    Ownership concentration; Corporate greenwashing; Opportunistic share selling; Insider trading; Capital market monitoring;
    All these keywords.

    JEL classification:

    • G34 - Financial Economics - - Corporate Finance and Governance - - - Mergers; Acquisitions; Restructuring; Corporate Governance
    • L21 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Business Objectives of the Firm
    • M21 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Economics - - - Business Economics
    • Q56 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environment and Development; Environment and Trade; Sustainability; Environmental Accounts and Accounting; Environmental Equity; Population Growth

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