Advertising and Corporate Green Innovation: From the Perspective of Greenwashing

Abstract

Advertising has been regarded as a tool for greenwashing. However, no studies have systematically tested this view. Using a large sample of Chinese listed firms from 2011 to 2023, this paper examines the effect of advertising on critical environmental action, namely green innovation. The empirical results show that advertising has a negative impact on green innovation. This finding is robust to a battery of robustness tests and is more prominent for state-owned enterprises and heavy pollution-emitting firms. Further analysis shows that advertising lowers the quantity and quality of green innovation. This finding means that advertising is a tool for greenwashing and seriously damages the corporate environmental protection ability.