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June 12, 2026International Review of Economics & FinanceOpen Access

Can Environmental Courts Inhibit Corporate Greenwash? Evidence from Heterogeneous LLMs

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Authors

ZKZhixuan KeDGDa GaoXZXinyi Zhong

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Overview

Randomized trial examines the impact of environmental courts on corporate greenwash in China, indicating significant decline in misleading practices.

Key Points

  • This research investigates whether environmental courts can effectively reduce corporate greenwashing by analyzing corporate disclosures.
  • Analyzed disclosures from Chinese A-share listed firms from 2001 to 2024 using heterogeneous large language models.
  • Examined the effect of the staggered establishment of environmental courts on corporate greenwash.
  • Conducted mechanism analyses to understand the role of financing constraints and media oversight.
  • Establishment of environmental courts is linked to a significant reduction in excessive environmental rhetoric (p<0.05).
  • Findings show alleviated financing constraints and stronger media scrutiny contribute to this reduction.
  • The effect is notably stronger among state-owned enterprises and firms with local CEOs.

Cite This Study

Ke et al. (2026) studied this question.

synapsesocial.com/papers/6a2ba3fa8101cf8926f028d2https://doi.org/10.1016/j.iref.2026.105502
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