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Can AI pilot policies foster corporate sustained green innovation? Quasi-experimental evidence from China

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  • Kong, Meiying
  • Xiong, Yiwen

Abstract

Sustained green innovation is imperative for achieving green and low-carbon development. However, it is frequently constrained by limited resources, uncertainty, and path dependence. As a fundamental component of the contemporary technological revolution, artificial intelligence (AI) has the potential to provide a novel stimulus for the enhancement of firms' capacity for sustained green innovation. The present study exploits the staggered rollout of China’s AI Innovation Pilot Zones (AIPZ) policy as a natural experiment in order to estimate its impact on corporate sustained green innovation. To this end, a staggered difference-in-differences (DID) design with firm and year fixed effects is employed. We find that the AIPZ policy significantly enhances firms’ sustained green innovation. The facilitation of this process is achieved mainly through two mechanisms: increasing R&D funding input and strengthening firms’ digital intelligence capabilities. The effects are more pronounced among state-owned enterprises, firms in heavily polluting industries, and firms located in China’s eastern and western regions. Policy synergy analysis further shows that the National Big Data Comprehensive Pilot Zone and the Air Pollution Control Key Zone amplify the AIPZ effect, whereas the Smart Construction Pilot exerts a negative moderating impact. This study advances our understanding of how AI can facilitate corporate green development and offers persistence-oriented evidence for evaluating AI pilot policies.

Suggested Citation

  • Kong, Meiying & Xiong, Yiwen, 2026. "Can AI pilot policies foster corporate sustained green innovation? Quasi-experimental evidence from China," Economic Analysis and Policy, Elsevier, vol. 91(C), pages 1734-1749.
    • Handle: RePEc:eee:ecanpo:v:91:y:2026:i:c:p:1734-1749
    DOI: 10.1016/j.eap.2026.06.008
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