State-owned equity participation and greenwashing behavior: evidence from Chinese private enterprises

Can state-owned equity participation inhibit private enterprises’ greenwashing behavior? If so, what are the mechanisms involved? Is there any difference in the impact of state-owned equity participation on private enterprises’ greenwashing behavior in different contexts? The answers to the above questions not only fill the existing research gaps but also provide new research ideas for greenwashing governance in developing countries. Using a sample of Chinese A-share listed private enterprises from 2011 to 2022, we examine the impact of state-owned equity participation on private enterprises’ greenwashing behavior. The results suggest that state-owned equity participation can significantly inhibit private enterprises’ greenwashing behavior. Mechanism analysis shows that state-owned equity participation suppresses private enterprises’ greenwashing behavior by alleviating financing constraints through the resource effect and reducing managerial myopia through the governance effect. Moderating effect analysis indicates that media attention can strengthen the inhibitory effect of state-owned equity participation on private enterprises’ greenwashing behavior. Heterogeneity analysis shows that the inhibitory effect of state-owned equity participation on private enterprises’ greenwashing behavior is more significant in areas with a low degree of marketization and non-heavy-polluting industries. The findings enrich the governance factors of private enterprises’ greenwashing conduct from the standpoint of diverse shareholders, assist developing countries in formulating more specific policy goals and provide important insights into global environmental governance practices.