Effects of greenwashing on financial performance: Moderation through local environmental regulation and media coverage

Abstract Recent research suggests that the effect of greenwashing and corporate financial performance (CFP) is ambiguous. This call for study contextual factors create contingencies in greenwashing–CFP relationship. Using a sample 2816 observations covering 735 Chinese‐listed firms 21 different industries from 2013 to 2017, this examines on CFP explores moderating effects local environmental regulation, media visibility favourability. Results show positively affects weakened with stringent regulations reversed low Our finding implies stakeholders could hardly identify context an emerging economy high‐level information asymmetry. However, regulation negative coverage reduce asymmetry, making easier be identified. It first investigate relationship institutional environment perspective.