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How Environmental Centralization Curb Corporate Greenwashing Behavior: Evidence From China

Tao Luo & Ziyang Li

Business Strategy and the Environment2026https://doi.org/10.1002/bse.70566article
AJG 3ABDC A
Weight
0.37

Abstract

Environmental regulatory institutions play a fundamental role in constraining corporate environmental behavior. However, existing literature offers limited insights into how environmental centralization influences corporate ethical decisions. Using a sample of Chinese listed firms from 2014 to 2023, this study leverages the environmental vertical management reform (EVMR) as a quasi‐natural experiment to examine the relationship between environmental centralization and corporate greenwashing. We find that EVMR significantly reduces firms' greenwashing behavior. This effect is more pronounced in regions with low environmental regulatory stringency, among SOEs, and for firms facing lower financing constraints. Mechanism analyses suggest that EVMR reduces greenwashing by enhancing environmental enforcement and firms' environmental protection investments. Our findings underscore the critical role of effective environmental regulatory institutions in deterring opportunistic greenwashing behavior and offer important policy implications for curbing unethical corporate decisions.

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https://doi.org/https://doi.org/10.1002/bse.70566

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@article{tao2026,
  title        = {{How Environmental Centralization Curb Corporate Greenwashing Behavior: Evidence From China}},
  author       = {Tao Luo & Ziyang Li},
  journal      = {Business Strategy and the Environment},
  year         = {2026},
  doi          = {https://doi.org/https://doi.org/10.1002/bse.70566},
}

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How Environmental Centralization Curb Corporate Greenwashing Behavior: Evidence From China

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Evidence weight

0.37

Balanced mode · F 0.40 / M 0.15 / V 0.05 / R 0.40

F · citation impact0.16 × 0.4 = 0.06
M · momentum0.53 × 0.15 = 0.08
V · venue signal0.50 × 0.05 = 0.03
R · text relevance †0.50 × 0.4 = 0.20

† Text relevance is estimated at 0.50 on the detail page — for your query’s actual relevance score, open this paper from a search result.