Digital washing and corporate total factor productivity

Based on a sample of 4,396 Chinese A-share listed companies from 2009 to 2024, this study explores the impact of digital washing as a selective disclosure strategy on corporate total factor productivity (TFP). The empirical findings are as follows. First, digital washing significantly improves corporate TFP. Second, mechanism tests reveal that digital washing promotes TFP by facilitating cooperative innovation, enhancing independent innovation capabilities and alleviating financing constraints. Third, dynamic effect analysis confirms a significant time-lag characteristic in the productivity-enhancing impact of digital washing. Fourth, the marginal effect of digital washing on total factor productivity follows an inverted U-shaped trend, which first increases and then decreases with the rise in digital washing intensity. For the vast majority of firms engaged in digital washing behaviours, their digital washing intensity falls within the reasonable range before the turning point. Market competition strengthens the promotional effect of digital washing on TFP, and only firms with a low level of actual digital transformation can effectively improve TFP through digital washing. The above findings indicate that digital washing is not merely a purely opportunistic behaviour. Firms should view it rationally, formulating differentiated disclosure strategies based on their resource endowments rather than blindly endorsing or avoiding it.