Institutional Investors' Site Visits and Corporate Greenwashing: Evidence From China

ABSTRACT This study examines the impact of institutional investors' site visits (IISVs) on corporate greenwashing. Using listed companies' data from 2012 to 2020 in China, we find that the IISVs decrease corporate greenwashing, and the effect is more notable among subsamples with substantial tangible assets enterprises, weak governance environment firms, non‐SOEs, operating within highly competitive industries, and situated in regions with poor environmental regulations. Moreover, mechanism analysis reveals that IISVs mitigate corporate greenwashing by improving information acquisition, reducing financing constraints, and attracting media attention. Overall, this study enriches the research on the governance factors of greenwashing at the firm level and the consequences of IISVs.