Inhibition or Exacerbation?The Impact of Common Institutional Ownership on Corporate ESG Greenwashing
In the context of"dual carbon,"ESG investment has emerged as a prominent area of interest for both enterprises and investors.Common institutional investors,in contrast to other investors,tend to steer clear of engaging in homogeneous competition among investment enterprises to maximize the returns of their investment portfolios,a factor that inevitably influences the ESG development of these enterprises.Building upon this characteristic of mutual institutional investors,the study examines how the investment characteristics of mutual institutional holdings affect the corporate ESG greenwashing and delineates two opposing mechanisms:inhibition and exacerbation.An analysis of a dataset comprising all A-share listed firms in China's Shanghai and Shenzhen markets from 2011 to 2021 reveals that(1)common institutional ownership exacerbates firms'ESG greenwashing at this stage,and(2)the results of the mechanism analysis suggest that common institutional ownership intensifies firms'ESG greehwashing through the formation of strategic alliances and pursuit of short-term dominance;and(3)the results of the heterogeneity analysis indicate that the exacerbation of ESG greenwashing by common institutional ownership is more pronounced in the low-pollution industry sample and less significant in the sample characterized by higher levels of institutional investors'visits.The conclusions remain robust after addressing endogeneity and conducting rigorous robustness tests.The findings of this paper offer valuable insights into both the speculative formation and the effective governance of ESG greenwashing.
common institutional ownershipcorporate greenwashingstrategic alliancesshort sightinvestors'visits
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