The impacts of urban development orientation of resource-based cities on environmental information disclosure and greenwashing behavior of listed firms in China

Resource-based cities (RBCs) across the globe grapple with severe pollution issues. Governments strive for sustainable development through planning and policies, yet the extent of environmental disclosure and greenwashing behavior among firms at the micro-industrial level within RBCs remains inadequately explored. This study investigates the influence of RBCs' urban development orientation on firms' environmental conduct. Leveraging China's "Sustainable Development Plan for Resource-Based Cities, 2013-2020" as a quasi-natural experiment, we examine the impact of urban development orientation on firms' environmental information disclosure and their commitment to sustainability. Employing the difference-in-differences methodology and a battery of robustness tests, our findings confirm that RBCs' urban development orientation policies significantly enhance firms' environmental information disclosure, mitigate greenwashing practices, with legitimacy effectiveness being the driving factor behind this positive outcome. Notably, this effect is more pronounced in RBCs with stringent environmental enforcement, a greater presence of local environmental groups, and heightened media attention. Our results underscore the role of long-term governmental planning and strategic design in fostering environmental governance.