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Customer concentration and corporate greenwashing

Author

Listed:
  • Wei, Yufen
  • Tang, Jinghua
  • He, Hongbo
  • Wu, Chanjun
  • Lin, Muyangzi
  • Xie, Haonan

Abstract

This study investigates the effect of customer concentration on corporate greenwashing. Our empirical analysis reveals a positive correlation between customer concentration and greenwashing, driven by reduced corporate transparency and higher agency costs. This effect is stronger in non-state-owned firms, those facing intense market competition, and those in less polluting industries. By contrast, the relationship is weaker for firms with government or state-owned clients, which may demand greater environmental and social accountability. Additionally, firms with concentrated customers are more likely to engage in greenwashing under negative media pressure. However, this correlation weakens in the post-COVID-19 period. Moreover, pressure-sensitive institutional investors encourage such firms to engage in greenwashing, whereas pressure-resistant investors curb this behavior. Lastly, effective internal controls mitigate greenwashing associated with concentrated customers. This research enhances our understanding of factors driving corporate greenwashing behavior and underscores the importance of transparency and stakeholder pressure in curbing it.

Suggested Citation

  • Wei, Yufen & Tang, Jinghua & He, Hongbo & Wu, Chanjun & Lin, Muyangzi & Xie, Haonan, 2025. "Customer concentration and corporate greenwashing," Research in International Business and Finance, Elsevier, vol. 79(C).
    • Handle: RePEc:eee:riibaf:v:79:y:2025:i:c:s0275531925003460
    DOI: 10.1016/j.ribaf.2025.103090
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    JEL classification:

    • G12 - Financial Economics - - General Financial Markets - - - Asset Pricing; Trading Volume; Bond Interest Rates
    • G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill
    • G34 - Financial Economics - - Corporate Finance and Governance - - - Mergers; Acquisitions; Restructuring; Corporate Governance
    • M12 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - Personnel Management; Executives; Executive Compensation
    • M41 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Accounting - - - Accounting

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