Recent research suggests that the effect of greenwashing and corporate financial performance (CFP) is ambiguous. This call for study the contextual factors that create contingencies in the greenwashing–CFP relationship. Using a sample of 2816 observations covering 735 Chinese‐listed firms in 21 different industries from 2013 to 2017, this research examines the effect of greenwashing on CFP and explores the moderating effects of local environmental regulation, media visibility and media favourability. Results show that greenwashing positively affects CFP and effect weakened with stringent environmental regulations and reversed with low media favourability. Our finding implies that stakeholders could hardly identify greenwashing in the context of an emerging economy with high‐level information asymmetry. However, local environmental regulation and negative media coverage could reduce this information asymmetry, making greenwashing easier to be identified. It is the first study to investigate greenwashing–CFP relationship from institutional environment perspective.

Despite increasing interest in the implications of greenwashing, few studies have examined the underlying mechanism and contingency of how greenwashing affects employee outcomes. In this study, we develop a mediated moderation model to analyze the impact of perceived greenwashing on employee job performance (i.e., task performance and organizational citizenship behavior). Using a questionnaire survey of 400 employees in 20 Chinese companies, the results reveal that perceived greenwashing negatively affects job performance and that the relationship is mediated by organizational cynicism. Furthermore, employees' green values strengthen the indirect negative relationship between perceived greenwashing practices and job performance through organizational cynicism. The study contributes to addressing the long-discussed problem of whether greenwashing pays vis-à-vis a human resource management perspective and micro-level approach. The findings indicate that a close cooperation between the human resources and corporate environmental responsibility management departments is required to achieve the sustainable development of businesses.