IDEAS home Printed from https://ideas.repec.org/a/eee/tefoso/v218y2025ics0040162525002410.html

Managerial myopia, technological innovation, and greenwashing: Moderating roles of financing constraints and environmental uncertainty

Author

Listed:
  • Zhao, Jiyang
  • Wang, Xiaohong

Abstract

With growing concerns about the issue of greenwashing, it has been increasingly deemed critical to investigate the antecedents of greenwashing. This study employs the management discussion and analysis (MD&A) to construct managerial myopia and examine its effect on greenwashing as well as the influence mechanism by using a dataset with 7428 observations from 2012 to 2022. This study demonstrates that firms exhibiting a higher level of managerial myopia are more inclined to engage in greenwashing practices, which can be mediated by technological innovation. In addition, this study also corroborates that financing constraints and environmental uncertainty can reinforce the positive influences of managerial myopia on greenwashing. The results also indicate that the effects of managerial myopia on greenwashing are more pronounced among firms in recession stage and those with high levels of pollution. These findings can help identify the antecedents of greenwashing and inhibit firms from engaging in such practices.

Suggested Citation

  • Zhao, Jiyang & Wang, Xiaohong, 2025. "Managerial myopia, technological innovation, and greenwashing: Moderating roles of financing constraints and environmental uncertainty," Technological Forecasting and Social Change, Elsevier, vol. 218(C).
    • Handle: RePEc:eee:tefoso:v:218:y:2025:i:c:s0040162525002410
    DOI: 10.1016/j.techfore.2025.124210
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0040162525002410
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.techfore.2025.124210?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. Xu, Yong & Li, Shanshan & Zhou, Xiaoxiao & Shahzad, Umer & Zhao, Xin, 2022. "How environmental regulations affect the development of green finance: Recent evidence from polluting firms in China," Renewable Energy, Elsevier, vol. 189(C), pages 917-926.
    2. Chai Bin‐Feng & Sultan Sikandar Mirza & Tanveer Ahsan & Muhammad Azeem Qureshi, 2024. "How uncertainty can determine corporate ESG performance?," Corporate Social Responsibility and Environmental Management, John Wiley & Sons, vol. 31(3), pages 2290-2310, May.
    3. Li Dong & Jinlong Chen & Huiling Guo, 2024. "Managerial myopia and outward foreign direct investment: Evidence from Chinese listed firms," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 45(2), pages 1026-1042, March.
    4. Ghosh, Dipankar & Olsen, Lori, 2009. "Environmental uncertainty and managers' use of discretionary accruals," Accounting, Organizations and Society, Elsevier, vol. 34(2), pages 188-205, February.
    5. Li, Lixu & Zhu, Wenwen & Wei, Long & Liu, Yaoqi & Jiang, Nan, 2025. "Digital technology-enabled carbon-neutral management: A mechanism of supply chain digitalization in carbon performance," Technological Forecasting and Social Change, Elsevier, vol. 210(C).
    6. Hyeong Joon Kim & Seongjae Mun & Seung Hun Han, 2023. "Corporate social responsibility and the alignment of CEO and shareholders wealth: Does a strong alignment induce or restrain CSR?," Corporate Social Responsibility and Environmental Management, John Wiley & Sons, vol. 30(2), pages 720-741, March.
    7. Hwan Joo Seo & Sung Jin Kang & Yong Jun Baek, 2020. "Managerial myopia and short-termism of innovation strategy: Financialisation of Korean firms," Cambridge Journal of Economics, Cambridge Political Economy Society, vol. 44(6), pages 1197-1220.
    8. Chen, Lifeng & Khurram, Muhammad Usman & Gao, Yuying & Abedin, Mohammad Zoynul & Lucey, Brian, 2023. "ESG disclosure and technological innovation capabilities of the Chinese listed companies," Research in International Business and Finance, Elsevier, vol. 65(C).
    9. Hu, Shuo & Wang, Ailun & Du, Kerui, 2023. "Environmental tax reform and greenwashing: Evidence from Chinese listed companies," Energy Economics, Elsevier, vol. 124(C).
    10. Nguyen, Lily & Vu, Le & Yin, Xiangkang, 2020. "The undesirable effect of audit quality: Evidence from firm innovation," The British Accounting Review, Elsevier, vol. 52(6).
    11. 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.
    12. Rong Ma & Yaqun Yi, 2024. "Managerial negative interpretation and environmental CSR: Evidence from China," Asia Pacific Journal of Management, Springer, vol. 41(4), pages 2437-2470, December.
    13. Jiao, Anqi & Lu, Juntai & Ren, Honglin & Wei, Jia, 2024. "The role of AI capabilities in environmental management: Evidence from USA firms," Energy Economics, Elsevier, vol. 134(C).
    14. Sun, Yuan & Wen, YouYun & Jiang, Senyang & Zhang, Haoxiang, 2024. "The ripple effect of environmental shareholder activism and corporate green innovation: Evidence from Chinese listed companies," International Review of Financial Analysis, Elsevier, vol. 93(C).
    15. Sheng, Xin & Guo, Songlin & Chang, Xiaochen, 2022. "Managerial myopia and firm productivity: Evidence from China," Finance Research Letters, Elsevier, vol. 49(C).
    16. Meilin Zhao & Xiaohong Wang & Shaopeng Zhang & Lei Cheng, 2024. "Business strategy and environmental information disclosure from a Confucian cultural perspective: Evidence from China," Business Strategy and the Environment, Wiley Blackwell, vol. 33(3), pages 1557-1577, March.
    17. Lu, Juan & Li, He & Yang, Ran, 2024. "Low carbon finance drives corporate carbon emissions reduction: A perspective from issuing carbon neutral bonds," Technological Forecasting and Social Change, Elsevier, vol. 203(C).
    18. Liao, Feimei & Sun, Yinghao & Xu, Shulin, 2023. "Financial report comment letters and greenwashing in environmental, social and governance disclosures: Evidence from China," Energy Economics, Elsevier, vol. 127(PB).
    19. Zhang, Dongyang, 2022. "Environmental regulation and firm product quality improvement: How does the greenwashing response?," International Review of Financial Analysis, Elsevier, vol. 80(C).
    20. Wu, Zhanchi & Fan, Xiangjun & Zhu, Bangzhu & Xia, Jiahui & Zhang, Lin & Wang, Ping, 2022. "Do government subsidies improve innovation investment for new energy firms: A quasi-natural experiment of China's listed companies," Technological Forecasting and Social Change, Elsevier, vol. 175(C).
    21. Xiaowei Ma & Wanwan Ma & Xin Zhao & Xiaoxiao Zhou & Kamel Si Mohammed, 2024. "Increasing Burdens or Reducing Costs: Influence of Corporate Social Responsibility on Cost Stickiness," Journal of the Knowledge Economy, Springer;Portland International Center for Management of Engineering and Technology (PICMET), vol. 15(1), pages 2136-2155, March.
    22. Xie, Jiayue & Chen, Lu & Liu, Yan & Wang, Shengnan, 2023. "Does fintech inhibit corporate greenwashing behavior?-Evidence from China," Finance Research Letters, Elsevier, vol. 55(PB).
    23. Lee, Gilsoo & Cho, Sam Yul & Arthurs, Jonathan & Lee, Eun Kyung, 2020. "Celebrity CEO, identity threat, and impression management: Impact of celebrity status on corporate social responsibility," Journal of Business Research, Elsevier, vol. 111(C), pages 69-84.
    24. Zhang, Dongyang, 2023. "Subsidy expiration and greenwashing decision: Is there a role of bankruptcy risk?," Energy Economics, Elsevier, vol. 118(C).
    25. Charles J. Hadlock & Joshua R. Pierce, 2010. "New Evidence on Measuring Financial Constraints: Moving Beyond the KZ Index," The Review of Financial Studies, Society for Financial Studies, vol. 23(5), pages 1909-1940.
    26. Zhou, Kuo & Qu, Zhi & Wei, Zhixuan & Zhao, Jiyang, 2023. "Does government fiscal pressure matter for firm environmental performance? The role of environmental regulation and tax competition," Economic Analysis and Policy, Elsevier, vol. 80(C), pages 1187-1204.
    27. Bendig, David & Schulz, Colin & Theis, Lukas & Raff, Stefan, 2023. "Digital orientation and environmental performance in times of technological change," Technological Forecasting and Social Change, Elsevier, vol. 188(C).
    28. Alexander, Anna & De Vito, Antonio & Menicacci, Luca, 2024. "At what cost? Environmental regulation and corporate cash holdings," Finance Research Letters, Elsevier, vol. 61(C).
    29. Tan, Xue & Yu, Lin & Fung, Hung-Gay, 2022. "Firms with short-termism: Evidence from expatriate controlling shareholders," Pacific-Basin Finance Journal, Elsevier, vol. 73(C).
    30. Rachelle C. Sampson & Yuan Shi, 2023. "Are U.S. firms becoming more short‐term oriented? Evidence of shifting firm time horizons from implied discount rates, 1980–2013," Strategic Management Journal, Wiley Blackwell, vol. 44(1), pages 231-263, January.
    31. Chang, Xin & Fu, Kangkang & Low, Angie & Zhang, Wenrui, 2015. "Non-executive employee stock options and corporate innovation," Journal of Financial Economics, Elsevier, vol. 115(1), pages 168-188.
    32. Ding, Hui & Jiang, Fuwei & Zhang, Shan & Zhang, Zhining, 2024. "Managerial myopia and corporate social responsibility：Evidence from the textual analysis of Chinese earnings communication conferences," Journal of Behavioral and Experimental Finance, Elsevier, vol. 41(C).
    33. Yaoqin Li & Xixiong Xu & Yushu Zhu & Mamiza Haq, 2021. "CEO decision horizon and corporate R&D investments: an explanation based on managerial myopia and risk aversion," Accounting and Finance, Accounting and Finance Association of Australia and New Zealand, vol. 61(4), pages 5141-5175, December.
    34. Xie, Xuejing & Gong, Yukai & Cheng, Le, 2025. "Managerial myopia and carbon emission: Evidence from China," Pacific-Basin Finance Journal, Elsevier, vol. 90(C).
    35. Fisman, Raymond & Svensson, Jakob, 2007. "Are corruption and taxation really harmful to growth? Firm level evidence," Journal of Development Economics, Elsevier, vol. 83(1), pages 63-75, May.
    36. Francois Brochet & Maria Loumioti & George Serafeim, 2015. "Speaking of the short-term: disclosure horizon and managerial myopia," Review of Accounting Studies, Springer, vol. 20(3), pages 1122-1163, September.
    37. Liu, Hongxun & Zhang, Zihan, 2023. "The impact of managerial myopia on environmental, social and governance (ESG) engagement: Evidence from Chinese firms," Energy Economics, Elsevier, vol. 122(C).
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Pi, Tianlei & Jiao, Linke & Zhou, Yuhan & Shi, Jin, 2026. "Biodiversity risk and corporate greenwashing: Evidence from China," Research in International Business and Finance, Elsevier, vol. 83(C).
    2. Dong, Yuting & Sun, Ziyuan & Zhou, Yiqiang, 2026. "Not all voices are equal: stakeholder environmental pressures and corporate green innovation strategies," Journal of Business Research, Elsevier, vol. 202(C).
    3. Wu, Yan & Li, Jinye & Zhu, Fuxian & Zhang, Lixia, 2026. "Environmental regulation and urban green development quality and efficiency: Evidence from China's environmental protection tax law as a quasi-natural experiment," International Review of Economics & Finance, Elsevier, vol. 105(C).

    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. Yin, Lei & Yang, Yuanyuan, 2024. "How does digital finance influence corporate greenwashing behavior?," International Review of Economics & Finance, Elsevier, vol. 93(PB), pages 359-373.
    2. Pi, Tianlei & Jiao, Linke & Zhou, Yuhan & Shi, Jin, 2026. "Biodiversity risk and corporate greenwashing: Evidence from China," Research in International Business and Finance, Elsevier, vol. 83(C).
    3. Xue, Kunkun & Chen, Xiaoxiao & Sun, Peipei & Li, Yongqing, 2024. "Supply chain network centrality and corporate greenwashing behavior," Finance Research Letters, Elsevier, vol. 70(C).
    4. Xiong, Jiacai & Yang, Zelin & Wang, Qing Sophie, 2025. "Can non-punitive regulation curb corporate greenwashing?Evidence from a word embedding model," Research in International Business and Finance, Elsevier, vol. 76(C).
    5. Zhen Huang & Yanxuan Shi & Ming Jia, 2025. "Greenwashing: A systematic literature review," Accounting and Finance, Accounting and Finance Association of Australia and New Zealand, vol. 65(1), pages 857-882, March.
    6. Xiaoli Hao & Erxiang Miao & Shufang Wen & Haitao Wu & Yan Xue, 2025. "Executive Green Cognition on Corporate Greenwashing Behavior: Evidence From A‐Share Listed Companies in China," Business Strategy and the Environment, Wiley Blackwell, vol. 34(2), pages 2012-2034, February.
    7. Yuan, Zhihui & Bao, Xianjun, 2025. "Corporate financing constraints and environmental information disclosure hype," International Review of Economics & Finance, Elsevier, vol. 102(C).
    8. 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.
    9. Feng, Yongjie & Zhang, Zenglian & Zhang, Jingxian & Zhou, Wenjie, 2025. "More authentic data asset disclosure by myopic managers: Evidence from China," International Review of Financial Analysis, Elsevier, vol. 105(C).
    10. 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).
    11. Jinyue Yu & Qiang Qiu & Yuyang Qiao, 2025. "Managerial decision horizon and corporate greenwashing: Evidence from China," Business Ethics, the Environment & Responsibility, John Wiley & Sons, Ltd., vol. 34(4), pages 1662-1683, October.
    12. Hanwen Chen & Siyi Liu & Di Zhang & Lei Zhang, 2025. "Corporate ESG Washing and ESG Rating Divergence: Evidence From China," Business Strategy and the Environment, Wiley Blackwell, vol. 34(7), pages 8390-8428, November.
    13. Zhao, Yinghan & Qu, Xiaoyu & Lucey, Brian, 2025. "Managerial myopia and biodiversity alignment- evidence from China," International Review of Financial Analysis, Elsevier, vol. 100(C).
    14. 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).
    15. Pengyu Chen & Zhongzhu Chu, 2024. "Mere facade? Is greenwashing behaviour lower in low‐carbon corporates?," Business Strategy and the Environment, Wiley Blackwell, vol. 33(5), pages 4162-4174, July.
    16. Zhang, Hua & Lai, Jie & Guo, Zheng, 2025. "When greenwashing meets ESG: Exploring the role of third-party ESG ratings in corporate greenwashing behavior," Journal of Business Research, Elsevier, vol. 200(C).
    17. Wang, Liangcheng & Fu, Lingjie & Yu, Boqi, 2026. "CEO industry expertise and corporate ESG performance," International Review of Economics & Finance, Elsevier, vol. 105(C).
    18. Yue, Tong & Tong, Jian & Wen, Xinyi & Chu, Chengjun, 2026. "Distrust and disclosure: Greenwashing governance and the neglected incentive withdrawal signals of environmental subsidies," Economic Modelling, Elsevier, vol. 156(C).
    19. Chen, Rongda & Wang, Maochuan & Yi, Yuyang & Gao, Yuanhao, 2026. "Democratizing corporate governance: How retail investors’ ESG attention reduces ESG-washing," International Review of Economics & Finance, Elsevier, vol. 105(C).
    20. Li, Weiping & Mao, Zhuowei & Ren, Xiaohang & Liang, Jing, 2025. "Retail investor attention: Guardian of corporate ESG integrity or catalyst for greenwashing?," Energy Economics, Elsevier, vol. 144(C).

    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:tefoso:v:218:y:2025:i:c:s0040162525002410. 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.sciencedirect.com/science/journal/00401625 .

    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.