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Artificial Intelligence Adoption and Corporate ESG Performance

Author

Listed:
  • Haowen Tian
  • Junkai Wang
  • Yue Cai

Abstract

Based on the annual report of Chinese listed companies, we use machine learning methods to generate an artificial intelligence (AI) dictionary, and then construct firm‐level AI measurements. Our empirical findings suggest that the use of AI by companies can significantly improve their environmental, social, and governance (ESG) performance by alleviating the financing constraints, improving information transparency, and improving corporate innovation. Further, our heterogeneity analysis shows that the impact of the use of AI on firms' ESG performance is more pronounced in regions with highly developed factor markets, in asset‐intensive industries, and in industries characterized by high levels of competition. This paper contributes to the existing research on corporate ESG performance and provides a theoretical foundation for companies to advance the development and application of AI technology.

Suggested Citation

  • Haowen Tian & Junkai Wang & Yue Cai, 2025. "Artificial Intelligence Adoption and Corporate ESG Performance," Business Strategy and the Environment, Wiley Blackwell, vol. 34(7), pages 8922-8945, November.
    • Handle: RePEc:bla:bstrat:v:34:y:2025:i:7:p:8922-8945
    DOI: 10.1002/bse.70032
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    References listed on IDEAS

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    Cited by:

    1. Chen, Yuhang & Zhong, Yilin & Xu, Feng & Zhang, Qinghua, 2025. "Driving environmental, social, and governance excellence: The direct and indirect effects of intelligent transformation," Structural Change and Economic Dynamics, Elsevier, vol. 75(C), pages 313-331.
    2. Jian Xue & Qian Zhang & Wu Zhu, 2025. "Generative AI for Analysts," Papers 2512.19705, arXiv.org.
    3. Wang, Yang & Wang, Yongheng & Yang, Pengyu, 2025. "Does artificial intelligence impact corporate ESG performance? Evidence from a quasi-natural experiment in China," Energy Economics, Elsevier, vol. 151(C).
    4. Junhui Jeff Cai & Xian Gu & Liugang Sheng & Mengjia Xia & Linda Zhao & Wu Zhu, 2025. "AI as "Co-founder": GenAI for Entrepreneurship," Papers 2512.06506, arXiv.org.

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