IDEAS home Printed from https://ideas.repec.org/a/gam/jsusta/v17y2025i3p1229-d1582893.html
   My bibliography  Save this article

Challenging to Change? Examining the Link Between Public Participation and Greenwashing Based on Organizational Inertia

Author

Listed:
  • Bei Liu

    (School of Economics and Management, China University of Mining and Technology, Xuzhou 221116, China)

  • Chengwu Li

    (School of Economics and Management, China University of Mining and Technology, Xuzhou 221116, China)

  • Yin Zhong

    (School of Economics and Management, China University of Mining and Technology, Xuzhou 221116, China)

Abstract

This study investigates the impact of public participation on corporate greenwashing behavior among listed companies in China from 2011 to 2019, set against a backdrop of increasing global environmental regulations. Corporate greenwashing, characterized by misleading environmental claims, poses a significant barrier to sustainable development. Despite the recognition of public participation in social governance, organizational inertia often prevents companies from responding effectively. Our analysis reveals that public participation leads to stricter environmental regulations, thereby reducing greenwashing practices. This finding remains robust through various tests, including variable substitution and model adjustments. However, we also find that higher levels of organizational inertia weaken the positive influence of public participation on combating greenwashing. Thus, this study underscores the necessity of establishing mechanisms for public participation that can effectively shape corporate decision-making, offering crucial insights for enhancing corporate accountability and advancing sustainable practices.

Suggested Citation

  • Bei Liu & Chengwu Li & Yin Zhong, 2025. "Challenging to Change? Examining the Link Between Public Participation and Greenwashing Based on Organizational Inertia," Sustainability, MDPI, vol. 17(3), pages 1-20, February.
    • Handle: RePEc:gam:jsusta:v:17:y:2025:i:3:p:1229-:d:1582893
    as

    Download full text from publisher

    File URL: https://www.mdpi.com/2071-1050/17/3/1229/pdf
    Download Restriction: no
    File URL: https://www.mdpi.com/2071-1050/17/3/1229/
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Goldstein, Jenny E. & Neimark, Benjamin & Garvey, Brian & Phelps, Jacob, 2023. "Unlocking “lock-in” and path dependency: A review across disciplines and socio-environmental contexts," World Development, Elsevier, vol. 161(C).
    2. Cohen, Shira & Kadach, Igor & Ormazabal, Gaizka, 2023. "Institutional investors, climate disclosure, and carbon emissions," Journal of Accounting and Economics, Elsevier, vol. 76(2).
    3. Wu, JunJie & Segerson, Kathleen & Wang, Chunhua, 2023. "Is environmental regulation the answer to pollution problems in urbanizing economies?," Journal of Environmental Economics and Management, Elsevier, vol. 117(C).
    4. Jessica Vandenberg, 2024. "Plastic Politics of Delay: How Political Corporate Social Responsibility Discourses Produce and Reinforce Inequality in Plastic Waste Governance," Global Environmental Politics, MIT Press, vol. 24(2), pages 122-145, Spring.
    5. Ciabuschi, Francesco & Dellestrand, Henrik & Kappen, Philip, 2012. "The good, the bad, and the ugly: Technology transfer competence, rent-seeking, and bargaining power," Journal of World Business, Elsevier, vol. 47(4), pages 664-674.
    6. Jie Zhen & Cejun Cao & Hanguang Qiu & Zongxiao Xie, 2021. "Impact of organizational inertia on organizational agility: the role of IT ambidexterity," Information Technology and Management, Springer, vol. 22(1), pages 53-65, March.
    7. Thomas P. Lyon & John W. Maxwell, 2011. "Greenwash: Corporate Environmental Disclosure under Threat of Audit," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 20(1), pages 3-41, March.
    8. Zhang, Dongyang, 2023. "Subsidy expiration and greenwashing decision: Is there a role of bankruptcy risk?," Energy Economics, Elsevier, vol. 118(C).
    9. Driss, Hamdi & Drobetz, Wolfgang & El Ghoul, Sadok & Guedhami, Omrane, 2024. "The Sustainability committee and environmental disclosure: International evidence," Journal of Economic Behavior & Organization, Elsevier, vol. 221(C), pages 602-625.
    10. Zhang, Dongyang, 2023. "Can environmental monitoring power transition curb corporate greenwashing behavior?," Journal of Economic Behavior & Organization, Elsevier, vol. 212(C), pages 199-218.
    11. Karaman, Abdullah S. & Orazalin, Nurlan & Uyar, Ali & Shahbaz, Muhammad, 2021. "CSR achievement, reporting, and assurance in the energy sector: Does economic development matter?," Energy Policy, Elsevier, vol. 149(C).
    12. Matthew J. Spaniol & Evita Danilova-Jensen & Martin Nielsen & Carl Gyldenkærne Rosdahl & Clara Jasmin Schmidt, 2024. "Defining Greenwashing: A Concept Analysis," Sustainability, MDPI, vol. 16(20), pages 1-17, October.
    13. Stéphane J. G. Girod & Richard Whittington, 2017. "Reconfiguration, restructuring and firm performance: Dynamic capabilities and environmental dynamism," Strategic Management Journal, Wiley Blackwell, vol. 38(5), pages 1121-1133, May.
    14. Dewan Muktadir‐Al‐Mukit & Firoz Haroon Bhaiyat, 2024. "Impact of corporate governance diversity on carbon emission under environmental policy via the mandatory nonfinancial reporting regulation," Business Strategy and the Environment, Wiley Blackwell, vol. 33(2), pages 1397-1417, February.
    15. Kaijun Gan & Silin Ye, 2024. "Window Dressing in Impression Management: Does Negative Media Coverage Drive Corporate Green Production?," Sustainability, MDPI, vol. 16(2), pages 1-22, January.
    16. Chunmei Li & Abbas Ali Chandio & Usman Farooq & Jam Ghulam Murtaza Sahito & Ge He, 2022. "Assessing the impact of mechanism of green public consumption policy on environmental equity: evidence from China," Environment, Development and Sustainability: A Multidisciplinary Approach to the Theory and Practice of Sustainable Development, Springer, vol. 24(1), pages 271-292, January.
    17. Iñaki Heras‐Saizarbitoria & Laida Urbieta & Olivier Boiral, 2022. "Organizations' engagement with sustainable development goals: From cherry‐picking to SDG‐washing?," Corporate Social Responsibility and Environmental Management, John Wiley & Sons, vol. 29(2), pages 316-328, March.
    18. Elisabeth Sinnewe & Troy Yao & Mahbub Zaman, 2021. "Informing or obfuscating stakeholders: Integrated reporting and the information environment," Business Strategy and the Environment, Wiley Blackwell, vol. 30(8), pages 3893-3906, December.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Jiang, Cuixia & Xu, Jialin & Xu, Qifa & Fu, Weizhong, 2024. "Can we rest easy under the registration-based IPO reform? Evidence from the Chinese growth enterprise market," Economic Analysis and Policy, Elsevier, vol. 83(C), pages 990-1006.
    2. Zhang, Dongyang, 2024. "The pathway to curb greenwashing in sustainable growth: The role of artificial intelligence," Energy Economics, Elsevier, vol. 133(C).
    3. Fu, Changluan & Yu, Chenyang & Guo, Mengting & Zhang, Lin, 2024. "ESG rating and financial risk of mining industry companies," Resources Policy, Elsevier, vol. 88(C).
    4. Zhang, Dongyang & Meng, Li & Zhang, Jintao, 2023. "Environmental subsidy disruption, skill premiums and ESG performance," International Review of Financial Analysis, Elsevier, vol. 90(C).
    5. Lin, Xudong & Zhu, Hao & Meng, Yiqun, 2023. "ESG greenwashing and equity mispricing: Evidence from China," Finance Research Letters, Elsevier, vol. 58(PD).
    6. Tan, Ruipeng & Cai, Qijun & Pan, Lulu, 2024. "Faking for fortune: Emissions trading schemes and corporate greenwashing in China," Energy Economics, Elsevier, vol. 130(C).
    7. Galletta, Simona & Mazzù, Sebastiano & Naciti, Valeria & Paltrinieri, Andrea, 2024. "A PRISMA systematic review of greenwashing in the banking industry: A call for action," Research in International Business and Finance, Elsevier, vol. 69(C).
    8. Li, Ziyang & Luo, Tao & Li, Jiangyi & Tian, Yihao, 2024. "Does social responsibility reform curb corporate greenwashing: Evidence from a quasi-natural experiment in China," International Review of Financial Analysis, Elsevier, vol. 96(PA).
    9. Jin, Xuanxuan & Qi, Hanying & Huang, Xin, 2024. "Green financial regulation and corporate strategic ESG behavior: Evidence from China," Finance Research Letters, Elsevier, vol. 65(C).
    10. Caroline Flammer & Michael W. Toffel & Kala Viswanathan, 2021. "Shareholder activism and firms' voluntary disclosure of climate change risks," Strategic Management Journal, Wiley Blackwell, vol. 42(10), pages 1850-1879, October.
    11. Imperiale, Francesca & Pizzi, Simone & Lippolis, Stella, 2023. "Sustainability reporting and ESG performance in the utilities sector," Utilities Policy, Elsevier, vol. 80(C).
    12. Najafi-Tavani, Zhaleh & Giroud, Axèle & Andersson, Ulf, 2014. "The interplay of networking activities and internal knowledge actions for subsidiary influence within MNCs," Journal of World Business, Elsevier, vol. 49(1), pages 122-131.
    13. Aaron K. Chatterji & David I. Levine & Michael W. Toffel, 2009. "How Well Do Social Ratings Actually Measure Corporate Social Responsibility?," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 18(1), pages 125-169, March.
    14. Aseem Kaul & Jiao Luo, 2018. "An economic case for CSR: The comparative efficiency of for‐profit firms in meeting consumer demand for social goods," Strategic Management Journal, Wiley Blackwell, vol. 39(6), pages 1650-1677, June.
    15. Andersson, Ulf & Dasí, Àngels & Mudambi, Ram & Pedersen, Torben, 2016. "Technology, innovation and knowledge: The importance of ideas and international connectivity," Journal of World Business, Elsevier, vol. 51(1), pages 153-162.
    16. Heyes, Anthony & Lyon, Thomas P. & Martin, Steve, 2018. "Salience games: Private politics when public attention is limited," Journal of Environmental Economics and Management, Elsevier, vol. 88(C), pages 396-410.
    17. Lixiang Wang & Wendi Hou & Yupei Liu, 2023. "How do co‐shareholding networks affect negative media coverage? Evidence from China," Accounting and Finance, Accounting and Finance Association of Australia and New Zealand, vol. 63(4), pages 4221-4249, December.
    18. Noémi Nemes & Stephen J. Scanlan & Pete Smith & Tone Smith & Melissa Aronczyk & Stephanie Hill & Simon L. Lewis & A. Wren Montgomery & Francesco N. Tubiello & Doreen Stabinsky, 2022. "An Integrated Framework to Assess Greenwashing," Sustainability, MDPI, vol. 14(8), pages 1-13, April.
    19. Trivedi, Jatin & Chakraborty, Dipanwita & Nobanee, Haitham, 2023. "Modelling the growth dynamics of sustainable renewable energy – Flourishing green financing," Energy Policy, Elsevier, vol. 183(C).
    20. Hongyi Mao & Zongjun Wang & Lin Yi, 2021. "Does Entrepreneurial Orientation Lead to Successful Sustainable Innovation? The Evidence from Chinese Environmentally Friendly Companies," Sustainability, MDPI, vol. 13(18), pages 1-19, September.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:gam:jsusta:v:17:y:2025:i:3:p:1229-:d:1582893. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: MDPI Indexing Manager (email available below). General contact details of provider: https://www.mdpi.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.