The Impact of Digital Transformation on Corporate Greenwashing Behavior

Abstract

This study examines the impact of digital transformation on corporate greenwashing behavior using data from 998 Chinese listed companies between 2015 and 2023. The findings suggest that digital transformation significantly reduces greenwashing by improving transparency and facilitating better environmental data management. Companies with larger sizes and higher financial leverage are more likely to engage in greenwashing, while those with higher environmental investments and female management tend to exhibit less greenwashing. Additionally, the study reveals that media attention plays a crucial role in reducing greenwashing by increasing external scrutiny, enhancing the credibility of environmental claims. However, executive stock incentives may weaken the effect of digital transformation on reducing greenwashing, as executives with high stock incentives are more inclined to exaggerate environmental commitments to boost short-term shareholder value. The research further highlights regional and industry differences, with digital transformation having a more significant impact in Eastern and Central China compared to the West. Overall, the study provides valuable insights into the role of digital transformation and external governance in mitigating corporate greenwashing, encouraging more transparent and responsible corporate behavior.