From Symbolic Compliance to Green Transition: The Green Shield Program and Corporate Green Fraud

This study analyzes the effect of environmental regulation on corporate green fraud using China’s Green Shield Program as a quasi-natural experiment. Adopting a staggered difference-in-differences (DID) approach, we find that the Green Shield Program is positively associated with green fraud of firms in nature reserves. Further analyses of economic consequences reveal that green fraud is correlated with short-term reputation improvement and alleviated financing constraints, as well as long-term corporate green innovation. Heterogeneity analyses indicate that the positive relationship between the Green Shield Program and green fraud is more pronounced for firms with higher executive green cognition, greater analyst coverage, and stricter environmental supervision.