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Speculative culture and corporate greenwashing: Evidence from China

Author

Listed:
  • Wang, Jianye
  • Ke, Yubing
  • Sun, Lingxia
  • Liu, Huifen

Abstract

As culture plays an important role in corporate decisions, this paper examines whether and how the culture of speculation affects corporate greenwashing. Using data of China's A-share listed companies over the period of 2010–2022 and data of provincial lottery sales as a proxy for speculative culture, we find that regional speculative culture positively affects corporate greenwashing. The effect is more pronounced among state-owned firms, firms with high managerial overconfidence and weak corporate governance, and firms located in low-level marketization and poor legal environment. Further, mechanism tests show that speculative culture increases cash flow volatility, agency costs, and managerial self-interest, through which corporate greenwashing is affected. This study adds to the literature on the determinants of corporate greenwashing from a perspective of informal institutions.

Suggested Citation

  • Wang, Jianye & Ke, Yubing & Sun, Lingxia & Liu, Huifen, 2024. "Speculative culture and corporate greenwashing: Evidence from China," International Review of Financial Analysis, Elsevier, vol. 95(PB).
    • Handle: RePEc:eee:finana:v:95:y:2024:i:pb:s105752192400379x
    DOI: 10.1016/j.irfa.2024.103447
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    More about this item

    Keywords

    Speculative culture; Corporate greenwashing; Corporate risk-taking; Agency costs; Managerial self-interest;
    All these keywords.

    JEL classification:

    • D21 - Microeconomics - - Production and Organizations - - - Firm Behavior: Theory
    • G38 - Financial Economics - - Corporate Finance and Governance - - - Government Policy and Regulation
    • M14 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - Corporate Culture; Diversity; Social Responsibility

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