Corporate Governance, Market Structure, And Greenwashing: Evidence from A Two-Part Model in an Emerging Market

Abstract

Objective: To examine whether corporate governance and product-market structure are associated with greenwashing among Brazilian firms and whether climate policy uncertainty conditions these relationships, distinguishing the occurrence of disclosure-performance misalignment from its conditional intensity. Methodology: We use a canonical panel of 970 firm-year observations from 105 firms over 2010–2023. Greenwashing is measured as the relative gap between Bloomberg® ESG Disclosure and LSEG Data & Analytics® environmental performance. The common sample includes 942 observations for the extensive margin and 516 observations with GW > 0 for the intensive margin. Preferred specifications use Logit and OLS with NAICS-3 and year fixed effects, NAICS-3 clustered standard errors, firm size measured as ln(total assets), a horse-race specification, and robustness tests. Findings: Corporate governance is not significant in the extensive margin (β = 0.007; p = 0.981) or intensive margin (β = -0.053; p = 0.683). HHI is likewise not significant (β = -0.350; p = 0.838; and β = -0.386; p = 0.354, respectively). Interactions with CCPU remain non-significant, and the inference is unchanged by winsorization, excluding market share from the HHI model, or reconstructing governance with seven empirically unique dimensions. Significance: The findings show that inferences about governance, competition, and greenwashing depend critically on simultaneous observability of disclosure and performance, sample comparability, and separation of occurrence from intensity.