Accelerating the green transformation of development patterns and the low-carbon transition of the economy and the society is essential for high-quality development. In the process of green transformation, corporate environmental practices fall into two categories: “greenwashing” as superficial and deceptive environmental commitments, and “genuine green behavior” that improves green performance through substantive green innovation and process upgrading. Frequent corporate “greenwashing” impedes environmental governance and societal green transformation, making stringent government environmental regulation increasingly vital.

By constructing a two-way fixed-effects model, this paper confirms the inhibitory effect of government environmental regulation on corporate “greenwashing”, and finds that government environmental regulation exerts dual green effects: It restrains “greenwashing” while simultaneously promoting “genuine green behavior”. Further research reveals that market competition intensity strengthens the dual green effects. By contrast, corporate life cycle weakens the inhibitory effect of government environmental regulation on “greenwashing”, and environmental subsidies attenuate its promotion effect on “genuine green behavior”. This indicates that the inhibitory effect on “pseudo-green behavior” and the promotion effect on “genuine green behavior” brought by government environmental regulation always coexist under different internal and external conditions. In addition, government environmental regulation exerts its dual green effects by strengthening external supervision, increasing corporate green investment, and alleviating financing constraints, and such effects are moderated by the degree of market competition.

The marginal contributions of this paper are as follows: First, it systematically and deeply focuses on the internal correlation between corporate “greenwashing” and genuine green transformation, and specifically explores the dual green effects of government environmental regulation. Second, it examines the heterogeneous impacts of the dual green effects of government environmental regulation under different conditions of market competition intensity, corporate life cycle, and environmental subsidies. Third, it explores the influencing mechanism underlying the dual green effects of government environmental regulation, proposes mechanism channels, and investigates whether there are differences in the influencing mechanism under different degrees of market competition.