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Controlling shareholders’ stock pledges and greenwashing–Evidence from China

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  • Li, Jiao

Abstract

This study examines whether controlling shareholders’ stock pledges may affect greenwashing. Controlling shareholders’ stock pledges can increase the commitment of controlling shareholders and reduce their risk-taking willingness. Both the existence and the percentage of controlling shareholders’ stock pledges are negatively related to greenwashing. The findings are robust to the 2SLS estimation with IV, PSM, entropy balancing, and other tests. Moreover, the effect is stronger for long-term stock pledges, suggesting that the longer duration of stock pledges may serve as a stronger motivation for controlling shareholders to restrain misconduct, which provides important insights on how to address greenwashing amid growing environmental concerns.

Suggested Citation

  • Li, Jiao, 2024. "Controlling shareholders’ stock pledges and greenwashing–Evidence from China," Finance Research Letters, Elsevier, vol. 69(PB).
    • Handle: RePEc:eee:finlet:v:69:y:2024:i:pb:s154461232401256x
    DOI: 10.1016/j.frl.2024.106227
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    More about this item

    Keywords

    Controlling shareholder; Share pledge; Greenwashing; Corporate governance;
    All these keywords.

    JEL classification:

    • M14 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - Corporate Culture; Diversity; Social Responsibility
    • M41 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Accounting - - - Accounting
    • N25 - Economic History - - Financial Markets and Institutions - - - Asia including Middle East
    • G30 - Financial Economics - - Corporate Finance and Governance - - - General
    • Q56 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environment and Development; Environment and Trade; Sustainability; Environmental Accounts and Accounting; Environmental Equity; Population Growth

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