Association Between The Actual Controller’s Overseas Residency And Companies’ Greenwashing Behavior

As the concept of ecological and environmental protection is deeply rooted in the hearts of the people,more and more attention has been paid to the enterprises in heavily polluting industries and their environmental responsibilities.As a bridge between the public and enterprises to communicate environmental information,the environmental information disclosed by corporate social responsibility report is regarded as an important embodiment of its fulfillment of environmental protection responsibility.However,in our country,there are no strict standards and regulations for information disclosure of the social responsibility report.This leads to some enterprises in the social responsibility report to mislead consumers by impression management or selective disclosure of environmental information,which is in essence corporate greenwashing behavior.As the ultimate controller of an enterprise,the actual controller of a private enterprise has the overseas right of abode,which provides an opportunity for the actual controller to evade the responsibility when the greenwashing behavior causes serious consequences.However,few studies have investigated the relationship between the actual controller and the company’s greenwashing behavior.Therefore,this paper attempts to deeply explore the relationship between the actual controller’s overseas right of abode and the company’s greenwashing behavior.Therefore,based on the theory of private gains from control rights,impression management theory,public pressure theory and principal-agent theory,this paper takes corporate social responsibility reports issued by private listed companies in heavily polluting A-share industries in Shanghai and Shenzhen during 2010-2021 as the research object.The symbolic and substantial environmental behaviors of enterprises are identified from the perspective of environmental information disclosure using text analysis method and the index system of greenwashing is constructed.On this basis,the relationship between the actual controller’s right of abode abroad and the company’s greenwashing behavior is studied.At the same time,the paper studies the difference of the influence of the actual controller’s right of abode abroad on the company’s greenwashing behavior under different control methods and internal and external supervision mechanisms.Finally,the industry-wide and long-term impact analysis of the actual controller’s overseas residence right on the company’s greenwashing behavior is discussed in the further analysis,and the audit fee is added to explore its role in the relationship between the actual controller’s overseas residence right and the company’s greenwashing behavior.The results of this paper are summarized as follows: first,overseas residency of the actual controller of private enterprises in heavily polluting industries will positively affect the greenwashing behavior of the enterprises,and this positive correlation is more significant when the actual controller directly controls the listed company;Secondly,the internal and external supervision mechanism represented by media attention and internal control can effectively inhibit the promoting effect of the actual controller’s right of overseas residence on the company’s greenwashing,and the inhibiting effect of the internal and external supervision mechanism is more significant when the actual controller indirectly controls the listed company.Thirdly,the further analysis shows that the influence of actual controller’s right of abode abroad on company greenwashing can be significantly inhibited by appropriately increasing audit fees.Fourthly,the positive influence of the actual controller’s right of overseas residence on the greenwashing behavior of the company only exists in the heavily polluting industries,and the influence exists for a long time.