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Greenwashing and product market competition

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  • Arouri, Mohamed
  • El Ghoul, Sadok
  • Gomes, Mathieu

Abstract

This study examines the relationship between corporate greenwashing and product market competition (PMC). Using an unbalanced panel of 324 US firms over the 2005–2015 period, we find that the negative impact of PMC on greenwashing is conditional on the level of environmental costs. Our results suggest that PMC is an effective disciplinary mechanism for achieving economic efficiency – in the case of firms featuring a high level of environmental costs– through an increase in the disclosure of reliable and material information.

Suggested Citation

  • Arouri, Mohamed & El Ghoul, Sadok & Gomes, Mathieu, 2021. "Greenwashing and product market competition," Finance Research Letters, Elsevier, vol. 42(C).
    • Handle: RePEc:eee:finlet:v:42:y:2021:i:c:s1544612321000088
    DOI: 10.1016/j.frl.2021.101927
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    More about this item

    Keywords

    Greenwashing; Product market competition; Environmental cost;
    All these keywords.

    JEL classification:

    • M14 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - Corporate Culture; Diversity; Social Responsibility
    • G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill
    • L10 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - General

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