With the increasing global emphasis on ESG (Environmental, Social, and Governance) investment principles, an increasing number of firms engaging in outward foreign direct investment (OFDI) are attempting to enhance their competitiveness in international markets by disclosing ESG-related information. However, some firms may exaggerate or embellish their ESG disclosuresknown as "greenwashing"to mislead consumers and investors. Therefore, examining the impact of greenwashing on Chinese firms OFDI is of significant importance. This study employs panel data of Chinese A-share listed companies from 2013 to 2023 and conducts regression analyses based on a set of econometric models. The results indicate that greenwashing behavior has a significantly positive effect on both the frequency and scale of firms OFDI. Further analysis reveals that greenwashing promotes OFDI by increasing government subsidies to enterprises. Heterogeneity analysis shows that this effect is more pronounced among state-owned enterprises and large-scale firms. This study contributes to the theoretical understanding of corporate OFDI motivations and provides practical insights for Chinese enterprises to better align with global green transition trends and participate more deeply in international industrial value chains.
Qi Liu (Wed,) studied this question.