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The announcement effect: How AI adoption reduces corporate ESG greenwashing

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  • Lei, Xue
  • Kocoglu, Mustafa
  • Nikbakht, Ehsan

Abstract

As artificial intelligence transforms corporate governance, AI adoption announcements may either enhance authentic ESG performance or serve as greenwashing instruments. AI implementation reduces greenwashing through operational improvements, yet the signaling function of adoption announcements remains unexplored. Using staggered difference-in-differences methodology and Chinese A-share data from 2013 to 2023, we find that AI adoption announcements significantly reduce greenwashing by attracting analyst attention, which enhances detection likelihood of disclosure-performance gaps, and by alleviating financing constraints, which makes authentic ESG investments economically viable. These external monitoring effects are strongest among large firms, heavily polluting industries, and state-owned enterprises. Our findings reveal that technology adoption announcements generate governance benefits independently of immediate implementation, reshaping information environments in capital markets.

Suggested Citation

  • Lei, Xue & Kocoglu, Mustafa & Nikbakht, Ehsan, 2026. "The announcement effect: How AI adoption reduces corporate ESG greenwashing," Finance Research Letters, Elsevier, vol. 99(C).
    • Handle: RePEc:eee:finlet:v:99:y:2026:i:c:s1544612326004198
    DOI: 10.1016/j.frl.2026.109890
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