How the Market Values Greenwashing? Evidence from China

Journal of Business Ethics

Volumn 128, Issue 3, 2015, Pages 547-574

  Du, Xingqiang ^a  

^a XIAMEN UNIVERSITY   (China)

Author keywords

China; Corporate environmental performance; Cumulative abnormal returns (CAR); Environmental wrongdoer; Greenwashing; Media coverage; The competitive effect; The contagious effect; The Global Reporting Initiative (GRI)

Indexed keywords

EID: 84897359134     PISSN: 01674544     EISSN: 15730697     Source Type: Journal    
DOI: 10.1007/s10551-014-2122-y     Document Type: Article

References (89)

1. Al-Tuwaijri, S. A., Christensen, T. E., & Hughes, K. E. (2004). The relations among environmental disclosure, environmental performance, and economic performance: A simultaneous equations approach. Accounting, Organizations and Society,29(5–6), 447–471.
2. Alves, I. (2009). Green spin everywhere: How greenwashing reveals the limits of the CSR paradigm. Journal of Global Change and Governance,I(1), 1–26.
3. Baker, M., Litov, L., Wachter, J. A., & Wurgler, J. (2010). Can mutual fund managers pick stocks? Evidence from their trades prior to earnings announcements. Journal of Financial and Quantitative Analysis,45(5), 1111–1113.
4. Blacconiere, W. G., & Northcut, W. D. (1997). Environmental information and market reactions to environmental legislation. Journal of Accounting, Auditing & Finance,12(2), 149–178.
5. Bragdon, J., & Marlin, J. (1972). Is pollution profitable? Risk Management,19(4), 9–18.
6. Brown, T. J., & Dacin, P. A. (1997). The company and product: Corporate associations and consumer product response. Journal of Marketing,61, 68–84.
7. Brown, S. J., & Warner, J. B. (1985). Using daily stock returns: The case of event studies. Journal of Financial Economics,14, 3–31.
8. Burdick, D. (2009). Top 10 greenwashing companies in America. Retrieved August 25, 2013 from http://www.huffingtonpost.com/2009/04/03/top-10-greenwashingcompa_n_182724.html.
9. Bushee, B. J., Core, J. E., Guay, W., & Hamm, S. J. (2010). The role of the business press as an information intermediary. Journal of Accounting Research,48(1), 1–19.
10. Chen, Y.-S. (2008a). The driver of green innovation and green image—Green core competence. Journal of Business Ethics,81(3), 531–543.
11. Chen, Y.-S. (2008b). The positive effect of green intellectual capital on competitive advantages of firms. Journal of Business Ethics,77(3), 271–286.
12. Chen, Y.-S. (2010). The drivers of green brand equity: Green brand image, green satisfaction, and green trust. Journal of Business Ethics,93(2), 307–319.
13. Chen, Y.-S., & Chang, C.-H. (2013). Greenwash and green trust: The mediation effects of green consumer confusion and Green Perceived Risk. Journal of Business Ethics,114, 489–500.
14. Chen, Y.-S., Lai, S.-B., & Wen, C.-T. (2006). The influence of green innovation performance on corporate advantage in Taiwan. Journal of Business Ethics,67(4), 331–339.
15. Cho, C. H., Guidry, R. P., Hageman, A. M., & Patten, D. M. (2012). Do actions speak louder than words? An empirical investigation of corporate environmental reputation. Accounting, Organizations and Society,37(1), 14–25.
16. Clarkson, P. M., Li, Y., Richardson, G. D., & Vasvari, F. P. (2008). Revisiting the relation between environmental performance and environmental disclosure: An empirical analysis. Accounting, Organizations and Society,33(4), 303–327.
17. Clarkson, P. M., Li, Y., Richardson, G. D., & Vasvari, F. P. (2011a). Does it really pay to be green? Determinants and consequences of proactive environmental strategies. Journal of Accounting and Public Policy,30(2), 122–144.
18. Clarkson, P. M., Overell, M. B., & Chapple, L. (2011b). Environmental reporting and its relation to corporate environmental performance. Abacus,47(1), 27–60.
19. Coase, R. H. (1960). The problem of social cost. Journal of Law and Economics,3(1), 1–44.
20. Cormier, D., & Magnan, M. (1999). Corporate environmental disclosure strategies: Determinants, costs and benefits. Journal of Accounting, Auditing and Finance,14(3), 429–451.
21. Dahl, R. (2010). Green washing: Do you know what you’re buying? Environmental Health Perspectives,118(6), A246–A252.
22. Dasgupta, S., Laplante, B., & Mamingi, N. (2001). Pollution and capital markets in developing countries. Journal of Environmental Economics and Management,42(3), 310–335.
23. De Villiers, C., & Van Staden, C. J. (2010). Shareholders’ requirements for corporate environmental disclosures: A cross country comparison. The British Accounting Review,42(4), 227–240.
24. Deegan, C., & Gordon, B. (1996). A study of the environmental disclosure practices of Australian corporations. Accounting and Business Research,26(3), 187–199.
25. Dixon-Fowler, H. R., Slater, D. J., Johnson, J. L., Ellstrand, A. E., & Romi, A. M. (2013). Beyond “Does it pay to be green?” A meta-analysis of moderators of the CEP–CFP relationship. Journal of Business Ethics,112(2), 353–366.
26. Djankov, S., McLiesh, C., Nenova, T., & Shleifer, A. (2001). Who owns the media? National Bureau of Economic Research Working Paper No. w8288.
27. Du, X. (2012). Does religion matter to owner-manager agency costs? Evidence from China. Journal of Business Ethics,. doi:10.1007/s10551-012-1569-y.
28. Du, X., Jian, W., Zeng, Q., & Du, Y. (2013). Corporate environmental responsibility in polluting industries: Does religion matter? Journal of Business Ethics,. doi:10.1007/s10551-013-1888-7.
29. Dyck, A., Volchkova, N., & Zingales, L. (2008). The corporate governance role of the media: Evidence from Russia. The Journal of Finance,63(3), 1093–1135.
30. Dyck, A., & Zingales, L. (2002). The corporate governance role of the media. In R. Islam (Ed.), The right to tell: The role of the media in development (pp. 107–137). Washington, DC: The World Bank.
31. Fang, L., & Peress, J. (2009). Media Coverage and the Cross-section of Stock Returns. The Journal of Finance,64(5), 2023–2052.
32. Fieseler, C., Fleck, M., & Meckel, M. (2010). Corporate social responsibility in the blogosphere. Journal of Business Ethics,91, 599–614.
33. Global Reporting Initiative (GRI) (2006). Sustainable Reporting Guildlines. Retrieved December 3, 2013 from http://www.globalreporting.org.
34. Gray, R., Kouhy, R., & Lavers, S. (1995). Corporate social and environmental reporting: A review of the literature and a longitudinal study of UK disclosure. Accounting Auditing and Accountability Journal,8(2), 47–77.
35. Greene, W. H. (2012). Econometric analysis (7th ed.). Upper Saddle River, NJ: Prentice Hall.
36. Greenpeace USA. (2013). Greenpeace greenwash criteria. Retrieved August 25, 2013 from http://www.stopgreenwash.org.
37. Gupta, S., & Goldar, B. (2005). Do stock markets penalize environment-unfriendly behavior? Evidence from India. Ecological Economics,52(1), 81–95.
38. Guthrie, J., & Parker, L. (1989). Corporate social reporting: A rebuttal of legitimacy theory. Accounting and Business Research,19(76), 343–352.
39. Hamilton, J. T. (1995). Pollution as news: Media and stock market reactions to the toxics release inventory data. Journal of Environmental Economics and Management,28(1), 98–113.
40. Hayward, P. (2009). The real deal? Hotels grapple with green washing. Lodging Magazine. Retrieved August 25, 2013 from http://www.lodgingmagazine.com/Main/Home.aspx.
41. Herman, E. (2002). The media and market in the United States. The right to tell the role of mass media in economic development (pp. 61–81). Washington, DC: The World Bank Institute.
42. Holliday, C. O., Schmidheiny, S., & Watts, P. (2002). Walking the talk: The business case for sustainable development. Sheffield: Greenleaf.
43. Hooks, J., & van Staden, C. J. (2011). Evaluating environmental disclosures: The relationship between quality and extent measures. The British Accounting Review,43(3), 200–213.
44. Horiuchi, R., & Schuchard, R. (2009). Understanding and preventing greenwash: A business guide. London: Futerra Sustainability Communications.
45. Howard, J., Nash, J., & Ehrenfeld, J. (1999). Industry codes as agents of change: Responsible care adoption by U.S. chemical companies. Business Strategy and the Environment,8, 281–295.
46. Huang, C. L., & Kung, F. H. (2010). Drivers of environmental disclosure and stakeholder expectation: Evidence from Taiwan. Journal of Business Ethics,96(3), 435–451.
47. Huberman, G., & Regev, T. (2001). Contagious speculation and a cure for cancer: A nonevent that made stock prices soar. The Journal of Finance,56(1), 387–396.
48. Hughes, S. B., Anderson, A., & Golden, S. (2001). Corporate environmental disclosures: Are they useful in determining environmental performance? Journal of Accounting and Public Policy,20, 217–240.
49. Ilinitch, A. Y., Soderstrom, N. S., & Thomas, T. E. (1998). Measuring corporate environmental performance. Journal of Accounting and Public Policy,17(4-5), 383–408.
50. Ingram, R., & Frazier, K. B. (1980). Environmental performance and corporate disclosure. Journal of Accounting Research,18, 612–622.
51. Investor Responsibility Research Center. (1992). Corporate environmental profiles directory. Washington, DC: Investor Responsibility Research Center.
52. Joe, J. R., Louis, H., & Robinson, D. (2009). Managers’ and investors’ responses to media exposure of board ineffectiveness. Journal of Financial and Quantitative Analysis,44(03), 579–605.
53. Joshua, K. (2001, March 22). A brief history of greenwash. CorpWatch.
54. Khanna, M., Quimio, W. R. H., & Bojilova, D. (1998). Toxics release information: A policy tool for environmental protection. Journal of Environmental Economics and Management,36(3), 243–266.
55. King, A. A., & Lenox, M. (2000). Industry self-regulation without sanctions: The chemical industry’s responsible care program. Academy of Management Journal,43, 698–716.
56. Klassen, R. D., & McLaughlin, C. P. (1996). The impact of environmental management on firm performance. Management Science,42(8), 1199–1214.
57. Kolari, J. W., & Pynnönen, S. (2010). Event study testing with cross-sectional correlation of abnormal returns. The Review of Financial Studies,23(11), 3996–4025.
58. Konar, S., & Cohen, M. A. (2001). Does the market value environmental performance? Review of Economics and Statistics,83(2), 281–289.
59. Lanoie, P., Laplante, B., & Roy, M. (1998). Can capital markets create incentives for pollution control? Ecological Economics,26(1), 31–41.
60. Laplante, B., & Lanoie, P. (1994). The market response to environmental incidents in Canada: A theoretical and empirical analysis. Southern Economic Journal,60, 657–672.
61. Laufer, W. S. (2003). Social accountability and corporate greenwashing. Journal of Business Ethics,43(3), 253–261.
62. Lewellen, S. & Metrick, A. (2010). Corporate governance and equity prices: Are results robust to industry adjustments? Working paper. Retrieved August 25, 2013 from https://wpweb2.tepper.cmu.edu/wfa/wfasecure/upload2010/2010_7.382644E+08_PARE_IGE_WFA.pdf.
63. Logsdon, J. M. (1985). Organizational responses to environmental issues: Oil refining companies and air pollution. In L. E. Preston (Ed.), Research in corporate social performance and policy (Vol. 7, pp. 47–71). Greenwich, CT: JAI.
64. Lyon, T. P., & Maxwell, J. W. (2011). Greenwash: Corporate environmental disclosure under threat of audit. Journal of Economics & Management Strategy,20(1), 3–41.
65. Lyon, T. P., & Montgomery, A. W. (2013). Tweetjacked: The impact of social media on corporate greenwash. Journal of Business Ethics,118(4), 747–757.
66. Miller, G. S. (2006). The press as a watchdog for accounting fraud. Journal of Accounting Research,44(5), 1001–1033.
67. Morris, S., & Shin, H. S. (2002). Social value of public information. The American Economic Review,92(5), 1521–1534.
68. Nyhan, B., & Reifler, J. (2010). When corrections fail: The persistence of political misperceptions. Political Behavior,32(2), 303–330.
69. Parguel, B., Benoît-Moreau, F., & Larceneux, F. (2011). How sustainability ratings might deter ‘greenwashing’: A closer look at ethical corporate communication. Journal of Business Ethics,102(1), 15–28.
70. Patten, D. M. (1992). Intra-industry environmental disclosures in response to the Alaskan oil spill. Accounting, Organizations and Society,17(5), 471–475.
71. Peng, X. (2012). Supervise to the end: The yearly list of greenwashing. Retrieved December 3, 2013 from http://green.sohu.com/20120216/n334949898.shtml.
72. Polonsky, M. J., Grau, S. L., & Garma, R. (2010). The new greenwash? Potential marketing problems with carbon offsets. International Journal of Business Studies,18(1), 49–54.
73. Rahman, N., & Post, C. (2012). Measurement issues in environmental corporate social responsibility (ECSR): Toward a transparent, reliable, and construct valid instrument. Journal of Business Ethics,105(3), 307–319.
74. Ramus, C. A., & Montiel, I. (2005). When are corporate environmental policies a form of greenwashing? Business and Society,44(4), 377–414.
75. Self, R. M., Self, D. R., & Bell-Haynes, J. (2010). Marketing tourism in the Galapagos Islands: Ecotourism or greenwashing? International Business & Economics Research Journal,9(6), 111–125.
76. Sharfman, M. P., & Fernando, C. S. (2008). Environmental risk management and the cost of capital. Strategic Management Journal,29(6), 569–592.
77. Sharma, S., Pablo, A. L., & Vredenburg, H. (1999). Corporate environmental responsiveness strategies: The importance of issue interpretation and organizational context. Journal of Applied Behavioral Science,35, 87–108.
78. TerraChoice. (2010). The sins of greenwashing. Ottawa, ON: TerraChoice Environmental Marketing.
79. TerraChoice Environmental Marketing. (2009). The seven sins of greenwashing: Environmental claims in consumer markets. Retrieved December 3, 2013 from http://sinsofgreenwashing.org/findings/greenwashing-report-2009.
80. Tolliver-Nigro, H. (June 29, 2009). Green market to grow 267 percent by 2012. Matter Network. Retrieved December 3, 2013 from www.matternetwork.com/2009/6/green-market-grow-267-percent.cfm.
81. Walley, N., & Whitehead, B. (1994). It’s not easy being green. Harvard Business Review,72(3), 46–52.
82. Wikipedia. (2013). Greenwashing. Retrieved August 25, 2013 from http://en.wikipedia.org/wiki/Greenwashing.
83. Winn, M. I., & Angell, L. C. (2000). Towards a process model of corporate greening. Organization Studies,21, 1119–1147.
84. Wiseman, J. (1982). An evaluation of environmental disclosures made in corporate annual reports. Accounting, Organizations and Society,7(1), 53–63.
85. Ye, K., & Zhang, R. (2011). Do lenders value corporate social responsibility? Evidence from China. Journal of Business Ethics,104, 197–206.
86. Yeomans, M. (2013). Communicating sustainability: The rise of social media and storytelling. Retrieved August 25, 2013 from http://www.guardian.co.uk/sustainable-business/communicating-sustainability-social-media-storytelling?CMP.
87. Yoon, Y., Gurhan-Ganli, Z., & Zhu, C. (2003). Drowing inferences about others on the basis of corporate association. Academy of Marketing Science,34(2), 167–173.
88. Zeghal, D., & Ahmed, S. (1990). Comparison of social responsibility information disclosure media by Canadian firms. Accounting, Auditing, and Accountability Journal,3(1), 38–53.
89. Zeng, S. X., Xu, X. D., Yin, H. T., & Tam, C. M. (2012). Factors that drive Chinese listed companies in voluntary disclosure of environmental information. Journal of Business Ethics,109(3), 309–321.