Greenwashing and Product Market Competition

14 Pages Posted: 2 Mar 2021 Last revised: 11 Dec 2023

See all articles by Mohamed Arouri

Mohamed Arouri

Université Côte d'Azur

Sadok El Ghoul

University of Alberta - Campus Saint-Jean

Mathieu Gomes

Université Clermont Auvergne

Date Written: January 7, 2021

Abstract

This study examines the relationship between corporate greenwashing and product market competition (PMC). Using an unbalanced panel of 324 US firms over the 2005-2015 period, we find that the negative impact of PMC on greenwashing is conditional on the level of environmental costs. Our results suggest that PMC is an effective disciplinary mechanism for achieving economic efficiency --in the case of firms featuring a high level of environmental costs-- through an increase in the disclosure of reliable and material information.

Keywords: Greenwashing, Product market competition, Environmental cost

JEL Classification: M14, G32, L10

Suggested Citation

Arouri, Mohamed and El Ghoul, Sadok and Gomes, Mathieu, Greenwashing and Product Market Competition (January 7, 2021). Finance Research Letters, Available at SSRN: https://ssrn.com/abstract=3761986

Mohamed Arouri

Université Côte d'Azur ( email )

France

Sadok El Ghoul

University of Alberta - Campus Saint-Jean ( email )

Edmonton, Alberta T6G 2R3
Canada
780-465-8725 (Phone)
780-465-8760 (Fax)

Mathieu Gomes (Contact Author)

Université Clermont Auvergne ( email )

Clermont-Ferrand
France

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