Page 239 - AJWEP-22-4

CEPI & ESG greenwashing: Exec. attention view

Table 7. Mechanism tests approach issues more comprehensively, conduct more
Variables Gws in-depth analyses, and adapt strategies more flexibly,
1 2 thereby enabling firms to respond more effectively to
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L. Cepi −0.053 - avoid risks.
(−1.23) (c) Financial background
Cepi - 0.053 Executives with a financial background, relying on
(1.34) their professional expertise, have unique advantages
Fs 0.064 0.035 in investment risk management, enabling them to
(1.42) (0.99) conduct diversified investments and allocate rational
corporate funds. This study conducted a subgroup
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Cepi* Fs 0.042** 0.020 regression based on whether executives have financial
(2.14) (1.00) backgrounds. As shown in columns 9–12 in Table 8,
Mshare 0.009*** 0.009*** firms with executives possessing financial backgrounds
(3.95) (4.27) tend to adopt Gws strategies at the early stage of CEPI
Size 0.088* 0.070 implementation. These firms engage in embellished or
(1.73) (1.46) symbolic disclosures to reduce the likelihood of being
Cr 0.004 0.025 inspected. However, as the inspection process advances
(0.10) (0.87) and the CEPI mechanism demonstrates its regulatory
rigor and governance determination, these enterprises
Audit fee 0.240*** 0.229*** are compelled to align with compliance requirements
(3.32) (3.37) by implementing substantive green transformation
Salary sum 0.099* 0.104** measures. They progressively abandon Gws practices
(1.92) (2.12) while adhering to standardized protocols for truthful
Ato 0.187** 0.143* information disclosure. As evidenced in Table 8,
(2.11) (1.66) enterprises with financially experienced executives
Bm −0.269 −0.251 exhibit superior adaptability when confronting
environmental crises, demonstrating a capacity
(−1.37) (−1.36) to dynamically adjust their strategic responses in
Top 0.002 0.002 accordance with evolving regulatory circumstances.
(0.72) (0.78)
Board −0.121 −0.135 5.4.2. Enterprise ownership
(−0.77) (−0.90) State-owned enterprises (SOEs), unlike private
Rdperson −0.054* −0.048 enterprises, are not solely driven by the pursuit of
(−1.69) (−1.57) economic benefits; they also bear responsibilities
related to environmental governance as mandated by the
Constant −7.211*** −6.676*** government. Considering that the impact of CEPI on
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(−6.98) (−6.77) corporate ESG Gws may differ significantly depending
Year effect Controlled Controlled on the nature of the enterprise, this study examined the
Industry effect Controlled Controlled two types of enterprises with different property rights in
R-squared 0.092 0.078 groups, with the results shown in Table 9. The findings
Notes: Columns 1 and 2 of Gws report the regression results for demonstrate that, when lagged by one period, the effect
the one-period lagged Cepi and the normal Cepi, respectively, of CEPI is significantly negative for SOEs, but not
after including the interaction terms for financial slack and CEPI. significant for private firms. This indicates that CEPI is
Firm-level clustering robust standard errors are presented in more effective in curbing ESG Gws behaviors among
parentheses and correspond to the t-values of the two-sided t-test. SOEs. A potential reason is that SOEs are subject to
*p<0.1, **p<0.05, ***p<0.01.
Abbreviations: Fs: Financial slack; cepi: Central environmental stricter regulation from the government and regulatory
protection inspection; Gws: Greenwashing; Cr: Current ratio; bodies following CEPI implementation. Moreover,
Ato: Asset turnover, Bm: Book-to-market ratio. SOEs face heightened expectations from industry

Volume 22 Issue 4 (2025) 231 doi: 10.36922/AJWEP025280219