Cheap talk or walking the talk? Retail investors' green activism and corporate green transformation impression management

Online interactive platforms have become an important channel through which external stakeholders, especially retail investors, participate in corporate environmental governance. However, there is ongoing debate over whether retail investors, by voicing their opinions through these platforms, promote substantive corporate green transformation or merely facilitate greenwashing. To address this question, using Q&A texts from the “ E -Interaction” and “Interactive Easy” platforms of China's A-share listed companies from 2010 to 2022, we examine how retail investors' green activism, reflected in expressions of environmental concern, affects corporate green transformation impression management and its underlying mechanisms. We find that retail investors' green activism significantly curbs corporate green transformation impression management, particularly firms' “more talk, less action” behavior. Heterogeneity analyses reveal that this effect is more pronounced in firms with higher agency costs, lower risk-taking capacity, greater information asymmetry, and weaker external audit oversight. Further analyses suggest that improved internal governance and enhanced external information disclosure serve as key mechanisms in reducing corporate impression management behavior. In addition, analyst attention functions as an external monitoring mechanism that reinforces the governance role of retail investor activism. Our findings provide insights into multi-stakeholder environmental governance and offer implications for corporate sustainability practices in China and other emerging economies.