Corporate Hype on Green Concept and Product Market Performance:Evidence based on Words vs Deeds
Based on the policy background of Chinese government's adherence to environmental protection and ecological civilization construction,the plan and practice on environmental protection of firms create an effect on market performance.While some enterprises normally comply to government's guidelines to refine green technology,some other firms deliberately hype on green concept to attract customers and expand market shares for better market performance.This paper measures the level of corporate hype on green concept based on the logic of"more words than deeds"and further examines the effect of corporate hype on market performance.We find that corporate hype on green concept enhances product market performance,and this effect is robust to a series of endogeneity tests and additional analyses.We then reveal that corporate hype on green concept stimulates product market performance by arousing media attention and alleviating financial constraints.Moreover,this positive effect is proved to be more pronounced in industries where the product market competition is fiercer,in cities where environmental contamination is less severe and the local government exerts more attention on environmental protection.Further analysis indicates that corporate hype on green concept increases the stock price crash risk which signifies worse future business prospects of the firms,implying that corporate hype is a short-sighted decision;the ESG rating system of capital market shows efficiency in governing corporate hype on green concept.These results help external stakeholders to recognize corporate hype strategy with"more words than deeds"and provide references for corresponding supervision departments to manage similar issues.The innovation of this paper is manifested in the following aspects:First,this paper exposes the strategic motive of corporate hype on green concept and expands the research related to its economic consequences.Prior studies have examined the impact of corporate hype strategy on resource acquisition and value creation,while this paper finds that corporate hype enhances product market performance in the short term,but incurs the risk of future stock price crashes and seriously harms long-term market performance,revealing its dual effect on corporate market performance and further enriching the relevant studies.Second,This paper provides new evidence on the determinants of market performance.Existing literature has testified the role of corporate social responsibility,digital transformation and false statements on corporate market performance.Based on the idea of"more words than deeds",this paper explores the different impact mechanisms of strategic information disclosure on market performance in a new scenario.Third,this paper reveals the governance role of the ESG rating in capital market in governing corporate hype on green concept.This may also inspire the market supervision departments to monitor the information disclosure of listed firms,which helps to strengthen their identification of corporate misleading disclosure behaviors,and maintain a good market information environment.Overall,these findings carry significant practical implications both for firms and the government.For firms,they should conduct timely and accurate environmental information disclosure according to the actual situation to help market participants fully understand their future growth opportunities and business prospects;implement the national environmental protection policy,actively carry out environmental protection activities,strive to tap their own environmental protection potential,promote the integration of environmental protection practices and business models,and fulfill their due responsibilities and obligations for the construction of ecological civilization;actively publicize their effective environmental protection behaviors through the media,guide external stakeholders to the correct cognition of corporate environmental responsibility.For the government regulators,they should promulgate relevant laws and regulations to strengthen the construction of the corporate environmental information disclosure system,strictly control the issuance of green credit and the approval of environmental protection projects,and eliminate the opportunistic disclosure behavior of enterprises from the source;scientifically assess the credibility and quality of corporate information disclosure,and punish the firms with"more words than deeds"to standardize the environmental information disclosure and maintain the market information environment.
corporate hype on green conceptproduct market performancereputation effectresource clustering effect
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