Abstract:
Effectively governing corporate greenwashing is an important safeguard for achieving the strategic goals of carbon peaking and carbon neutrality. Existing research mostly emphasizes the role of external constraints—such as mandatory regulation and external oversight—in curbing corporate greenwashing, while paying relatively little attention to policy incentives. The value-added tax (VAT) credit refund reform covers industries such as chemical raw materials, electronic information, and pharmaceuticals, as well as power grid enterprises, and substantially overlaps with industries in which greenwashing is prevalent. Taking the VAT credit refund reform as a representative case and using a sample of A-share companies listed on the Shanghai and Shenzhen stock exchanges that engage in environmental information disclosure, this study finds that the tax incentive policy significantly inhibits corporate greenwashing. The underlying mechanisms operate through two channels: first, the policy alleviates corporate financing constraints, thereby reducing firms' incentive to obtain external financing through greenwashing strategies; second, it enhances management's confidence in the firm's future development prospects, leading them to place greater emphasis on sustainable development strategies and to increase substantive environmental protection investment. Further analysis indicates that the inhibitory effect of the credit refund reform on corporate greenwashing is more pronounced for firms located in regions with stronger environmental regulation, firms in polluting industries, and capital-intensive and larger firms; moreover, the inhibitory effect of the reform on greenwashing helps to improve the quality of corporate information disclosure and reduce ESG rating divergence. This study enriches the literature on how tax incentives affect the behavior of micro-level firms and offers implications for the practical governance of corporate greenwashing.
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