Relationship between the Degree of Internationalization and Greenwashing of Environmental Responsibilities in China-Based on the Legitimacy Perspective

Kesen Zhang,Zhen Pan,Mukund Janardhanan

doi:10.3390/su14052794

Abstract

Based on the legitimacy theory, A-share-listed companies in the Shanghai and Shenzhen Stock Exchanges from 2007 to 2018 are taken as the research sample. This paper explores the internal mechanism of how internationalization degree affects the greenwashing behavior of Chinese multinational enterprises, and tests the moderating mechanism of legitimacy pressures from the home country. The findings are as follows: First, under the background of internationalization, enterprises are more inclined to greenwash, and this tendency is more obvious with the increase in internationalization degree. Second, in the full sample analysis, the moderating effects of environmental regulation, public pressure, and industry pressure are not statistically significant. Third, the moderating effect of legitimacy pressures varies due to the heterogeneity of regions and property rights of the enterprises. The statistical significance of the moderating effect is affected by the diversity of environmental regulation measures, but it can be roughly concluded that the eastern and western regions show a negative moderating effect, and the central region shows a positive moderating effect. The current moderating effect of public pressure is much stronger than the lagging moderating effect, and it shows obvious regional and property rights differences. The moderating effect of industry pressure also shows obvious regional and property rights differences.

Highlights

With the increasing impact of Chinese multinational corporations (CMCs) on global economic and social development, stakeholders continue to pay attention to the social and environmental responsibilities of CMCs
The internationalization degree lagging one stage is used as an instrumental variable (IV) to perform regression on Equation (6) [58]
The contributions of this paper are reflected in the following aspects: First, in previous studies, environmental responsibility is seldom carried out from the perspective of greenwashing under the background of internationalization of Chinese listed companies, which is a useful supplement to existing research [30,63,64] Second, diving factors of greenwashing from host countries are usually considered, such as institutional distance, which is used for researching the internationalization issues of an emerging market [1]

Summary

Introduction

With the increasing impact of Chinese multinational corporations (CMCs) on global economic and social development, stakeholders continue to pay attention to the social and environmental responsibilities of CMCs. To satisfy the legitimacy requirements of domestic regulators, the greenwashing phenomenon of social responsibility and environmental responsibility of multinational corporations occurs [1]. China institutional environment, which seems to limit attention in the broader international business literature. This is a research gap worth addressing. If we want to understand the legitimacy and greenwashing of MNCs in the context of globalization, we need to understand whether the degree to which MNCs’ activities are internationalized leads to more complex disclosures of environmental responsibility, since greenwashing is essentially a selective environmental information disclosure act [4].

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Conclusion