Green Innovation and Stock Risk in Emerging Markets: Estimating the Greenwashing Fatigue Threshold in Media Coverage

ABSTRACT This study examines how media coverage nonlinearly influences the relationship between green innovation and stock risk in China. We suggest that while moderate media attention supports green innovation as a credible ethical signal, reducing stock risk, excessive coverage causes “greenwashing fatigue,” investor skepticism, and information overload. Analyzing 9927 firm‐year observations, we discover an inverted U‐shaped effect: media initially enhance innovation's risk‐reducing benefits, but beyond a certain point, they diminish or negate them. Our findings contribute to signaling theory and provide important insights into the ethical communication of sustainability, emphasizing the dangers of media saturation in an era acutely aware of greenwashing.