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Decarbonization through artificial intelligence innovation: Firm-level evidence from China

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  • Zhang, Yuanyuan
  • Ma, Mingze

Abstract

As a core driver of the new wave of technological transformation, artificial intelligence (AI) holds substantial potential in tackling climate change challenges and lowering carbon emissions. Drawing on data from Chinese A-share listed firms (2010–2023), we examine how AI innovation impacts corporate carbon emissions and the underlying mechanisms. We find that AI innovation reduces both direct and indirect carbon emissions, primarily by promoting green innovation, alleviating financing constraints, and enhancing external monitoring. The effect is stronger among firms with higher environmental information disclosure quality and located in regions with weaker environmental regulation. These findings suggest that AI innovation can effectively facilitate corporate low-carbon transition and promote sustainability.

Suggested Citation

  • Zhang, Yuanyuan & Ma, Mingze, 2025. "Decarbonization through artificial intelligence innovation: Firm-level evidence from China," Finance Research Letters, Elsevier, vol. 86(PD).
    • Handle: RePEc:eee:finlet:v:86:y:2025:i:pd:s1544612325018665
    DOI: 10.1016/j.frl.2025.108612
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