Abstract
Understanding the impact of FinTech on firms' greenwashing behavior is essential for the advancement of green finance. This paper utilizes data on Chinese listed firms from 2011 to 2021 to illustrate how FinTech impacts the firms' greenwashing behavior. Our main finding is that FinTech inhibits firms' greenwashing behavior through two mechanisms: externally, by reducing information asymmetry and financial constraints, and internally, by increasing total factor productivity (TFP) and operational efficiency. Heterogeneity tests show that FinTech significantly reduces greenwashing behaviors in high-tech firms, highly polluting firms, firms with environmentally conscious executives, and firms located in provinces with high levels of FinTech development, government intervention, and low industrialization. This paper reveals how FinTech drives firms' ESG performance and curbs insincere ESG behaviors and aims to unpack the “black box” of how FinTech influences greenwashing behaviors.
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