Does network infrastructure impact firms’ ESG greenwashing? A quasi-natural experimental study based on the ‘Broadband China’ strategy

In recent years, China has actively promoted the 'new infrastructure' strategy, and the construction of network infrastructure has provided strong technical support and an efficient information exchange platform for the development of enterprises. This paper investigates the effect and mechanisms of network infrastructure on firms' ESG greenwashing using a quasi-natural experimental study based on the 'Broadband China' strategy. The paper takes China's A-share listed firms from 2010 to 2022 as research samples and the results show that those firms whose registered cities are selected as pilot cities increase their ESG greenwashing, indicating the improvement of network infrastructure exacerbates firms' greenwashing behavior. After a series of robustness tests, the results remain the same. Additionally, the mechanism explorations suggest that firms with more significant financial constraints would be more motivated to conduct ESG greenwashing when they face 'Broadband China' strategy. Moreover, the higher the analyst coverage of the firms, the stronger the impact of the 'Broadband China' strategy on the firms' ESG greenwashing. Overall, the findings of this paper provide additional empirical evidence for impression management theory, and the paper not only reveals the impact of network infrastructure on firms' ESG greenwashing but also raises an issue of concern for stakeholders and market regulators.