Environmental regulation and corporate greenwashing behavior: Evidence from A-share listed companies in China

Using 8204 firm-year observations for Chinese A-share listed companies from 2012 to 2023, this study examines the relationship between environmental regulation and corporate greenwashing. Environmental regulation is negatively associated with greenwashing, and this finding is robust to an instrumental-variable design based on distance to the provincial environmental protection bureau, alternative measures, placebo permutations, dynamic-panel estimators, and a bias-corrected least-squares dummy-variable estimator. Public environmental concern and demand uncertainty strengthen the negative association. Executives' environmental background constitutes a statistically significant. The negative association is stronger in heavily polluting industries and among more financially constrained firms. These findings clarify the conditions under which environmental regulation is associated with less corporate greenwashing and support differentiated, evidence-based enforcement.