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Green transformation or greenwashing? Strategic options for competitiveness in corporate green activities
Xiaoping Duan1, Xue Liu1, Xiaohang Ren2
1School of Business, Central South University, Changsha, China.
Abstract:
Amid stringent global environmental governance, corporate green investment has become a key strategy for competitiveness, yet whether it boosts performance or is merely symbolic remains understudied. Using data from China's A-share listed companies during 2008-2022, this study finds that green investment significantly reduces corporate competitiveness, a conclusion that holds under a series of robustness tests. The negative impact works by reducing total factor productivity, increasing financing constraints, and lowering ESG scores. Heterogeneity analysis shows this effect is strongest in firms with low executive green awareness, high industry concentration, high government subsidies, and high-pollution industries. These findings explain firms' tendency toward greenwashing over substantive green transformation, and suggest nuanced policies: incentivize green investment while strengthening environmental compliance and disclosure to guide authentic green transformation.
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