Confucian institutional ethics: an informal constraint on corporate greenwashing

Amidst global efforts towards low-carbon transition and the increasing focus on corporate environmental responsibility, understanding the role of informal institutions becomes crucial. Positioning Confucian culture as an informal institutional factor, this study examines its impact on corporate greenwashing mitigation using panel data from Chinese listed firms between 2010 and 2024. Empirical results demonstrate that Confucian culture significantly inhibits corporate greenwashing, a conclusion supported by robustness and endogeneity tests. Furthermore, we identify the underlying mechanisms, including corporate social responsibility, managerial self-interest, and accounting information disclosure. Heterogeneity analysis reveals that this inhibitory effect is particularly pronounced in regions with relatively weak Western cultural influence and formal rules. This study enriches upper echelons theory, imprinting theory, and social responsibility theory, providing empirical evidence for understanding how Confucian culture shapes corporate environmental decision-making. Collectively, it provides robust empirical evidence on the pivotal role of informal cultural institutions in guiding corporate environmental conduct and facilitating low-carbon transition.