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CEPI & ESG greenwashing: Exec. attention view

regions. Therefore, this study grouped the samples based low, with fewer potential environmental problems.
on region, eastern vs. non-eastern, with results shown in In contrast, the results also showed that firms in
Table 10. The results showed that at the beginning of non-eastern region, where economy development is
CEPI inspection, ESG Gws behavior in eastern firms relatively lagging, exhibited more pronounced ESG
did not significantly intensify; at the later stage, the Gws behaviors, particularly in the early stages of
overall suppression effect was weaker than that in non- inspection. Some firms attempted to conceal non-
eastern regions. This may be attributed to the eastern compliance through Gws to attract ESG investments or
region’s more advanced economic development, mature avoid scrutiny. However, faced with strong regulatory
market system, favorable competitive environment, enforcement and the deterrence effect of CEPI, these
stricter local environmental regulation, and greater enterprises were eventually compelled to undergo
enterprise emphasis on environmental responsibility. rectification, resulting in a more substantial reduction in
Consequently, the level of ESG Gws was relatively ESG Gws levels.

Table 9. Enterprise ownership 6. Further analysis: CEO power and Fs
Variables Gws allocation
1 2
Nature of business State enterprise Private enterprise All decision-making and innovative activities of
enterprises are based on resources. At the same time,
L. Cepi −0.156*** −0.058 the state of resources within an enterprise constrains
(−2.70) (−0.99) its subsequent development and decision-making.
Control variables Controlled Controlled Abundant resources give managers the autonomy to
Year effect Controlled Controlled make decisions and respond promptly to policy shocks.
Industry effects Controlled Controlled To enable the flexible deployment of resources, a high
Observations 1,959 2,046 degree of power in the hands of managers is essential.
Power embodies the ability of individual actors
R-squared 0.148 0.115 to exert their influence and is an important factor in
Note: Firm-level clustering robust standard errors are presented determining the efficiency of resource allocation and
in parentheses and correspond to the t-values of the two-sided 51
t-test. *p<0.1, **p<0.05, ***p<0.01. strategic decision-making. As a core leader of an
Abbreviations: cepi: Central environmental protection enterprise, the CEO plays a pivotal role in shaping the
inspection; Gws: Greenwashing. firm’s development strategy, leading product selection

Table 10. Regional heterogeneity
Variables Gws
1 2 3 4
Whether in an eastern region Yes No Yes No
Cepi 0.048 0.196*** - -
(1.31) (3.03)
L. Cepi - - −0.085* −0.241***
(−1.76) (−2.73)
Control variables Controlled Controlled Controlled Controlled
Year effect Controlled Controlled Controlled Controlled
Industry effects Controlled Controlled Controlled Controlled
Observations 3,671 1,612 2,790 1,218
R-squared 0.120 0.118 0.146 0.136
Notes: A small number of firms have registered addresses outside of the country. Columns 1 and 2 of GWS report the Cepi results of firms
located in eastern and non-eastern regions, respectively; Columns 3 and 4 of GWS report the one-period lagged Cepi results located in
eastern and non-eastern regions, respectively. Firm-level clustering robust standard errors are presented in parentheses and correspond to
the t-values of the two-sided t-test. *p<0.1, **p<0.05, ***p<0.01.
Abbreviations: cepi: Central environmental protection inspection; Gws: Greenwashing.

Volume 22 Issue 4 (2025) 233 doi: 10.36922/AJWEP025280219