Transformation Illusion: Antecedents and Environmental Moderators of Corporate Digital Washing

This study uses a sample of Chinese listed firms from 2013 to 2023 to empirically investigate the antecedents of digital washing and analyze environmental moderators. The findings reveal that both peer effect and capability inadequacy are significant antecedents of digital washing. Moreover, increased equity concentration strengthens the impact of both peer effect and capability inadequacy on digital washing. Increased analyst coverage strengthens the impact of peer effect, while mitigating the impact of capability inadequacy. Heterogeneity analyses further indicate that the moderating effect of equity concentration on peer effect is more pronounced in profit-oriented firms, whereas its moderating effect on capability inadequacy is more pronounced in non-profit-oriented firms. The moderating effects of analyst coverage on both peer effect and capability inadequacy are more pronounced in non-profit-oriented firms.