How does corporate greenwashing affect firm resilience –Causal inference utilizing dual machine learning techniques

In the context of accelerating climate change, corporate greenwashing (CGW), has emerged as a critical governance risk undermining long-term sustainable development. Grounded in dynamic capability theory supplemented by paradox theory, this study unveils systematically the causal mechanisms through which CGW affects firm resilience for the first time as far as we are aware. Drawing on panel data from Chinese listed manufacturing firms between 2017 and 2023, we construct a novel CGW index using text analysis and measure firm resilience via the volatility of total factor productivity. To address endogeneity concerns and accommodate high-dimensional controls, we adopt a double machine learning approach. Our findings show: (1) CGW significantly undermines firm resilience by distorting the dynamic capability cycle of sensing, seizing, and reconfiguring; (2) financing constraints act as a negative mediating mechanism in that CGW exacerbates information asymmetries, thereby raising financing costs, whereas operational slack functions as a positive mediator, as redundant resources provide short-term buffers against external shocks; and (3) environmental regulation intensity and investor attention positively moderate this negative relationship, meaning private enterprises exhibit greater vulnerability due to limited access to policy-based resources. This research contributes to the theoretical advancement of firm resilience by introducing CGW as a “dark side” capability and identifies mechanisms of internal mediation and external moderation. The findings provide practical insights for firms aiming to mitigate CGW, optimize resource allocation, and enhance risk management.