ABSTRACT Existing studies, primarily centered on developed economies, tend to conceptualize greenhushing as a form of strategic silence to avoid regulatory scrutiny. By contrast, we argue that China's greenhushing stems more from institutional fragility and limited corporate environmental awareness, resulting in the neglect of environmental disclosure. Using the 2015 New Environmental Protection Law (NEWL) as a quasi‐natural experiment, we investigate whether enhanced salience of nongovernmental stakeholders and institutional transparency reduce greenhushing among Chinese firms. Drawing on 5098 firm‐year observations from 2010 to 2020, difference‐in‐differences analyses reveal that the NEWL significantly reduces greenhushing, particularly among heavily polluting firms with strong bargaining power, weak public oversight, nonenvironmental executives, and limited financial capacity. These results suggest the presence of a compensatory compliance mechanism, whereby firms previously disengaged from disclosure react more strongly to regulatory pressure. Our study contributes to the emerging literature on greenhushing by uncovering its nonstrategic roots in an emerging economy and offering implications for improving environmental transparency through nongovernmental stakeholder empowerment and strong corporate internal incentives.
Wang et al. (2026) studied this question.