IDEAS home Printed from https://ideas.repec.org/a/eee/reveco/v99y2025ics1059056025001704.html
   My bibliography  Save this article

Impact of AI applications on corporate green innovation

Author

Listed:
  • Xi, Kang
  • Shao, Xuefeng

Abstract

In the context of China's efforts to achieve carbon peaking and carbon neutrality goals, this study examined the impact of artificial intelligence (AI) applications on corporate green innovation (CGI) and the mechanism underlying such impact. Based on the panel data of 5209 Chinese listed firms from 2003 to 2022, this study empirically analyzed the relationship between AI applications and CGI using text analysis and econometric methods. The results revealed that AI applications significantly positively affect CGI. Additionally, media attention positively moderates the relationship between AI applications and CGI efficiency. Heterogeneity analysis further revealed the significantly different roles of various factors (e.g., region, industry, and nature of corporate ownership) in the relationship between AI applications and CGI. Our findings provide empirical support for the role of AI applications in achieving China's carbon peaking and carbon neutrality goals, and are of both theoretical and practical significance to promoting green transformation in China's economic development.

Suggested Citation

  • Xi, Kang & Shao, Xuefeng, 2025. "Impact of AI applications on corporate green innovation," International Review of Economics & Finance, Elsevier, vol. 99(C).
    • Handle: RePEc:eee:reveco:v:99:y:2025:i:c:s1059056025001704
    DOI: 10.1016/j.iref.2025.104007
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S1059056025001704
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.iref.2025.104007?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Dwivedi, Yogesh K. & Hughes, Laurie & Ismagilova, Elvira & Aarts, Gert & Coombs, Crispin & Crick, Tom & Duan, Yanqing & Dwivedi, Rohita & Edwards, John & Eirug, Aled & Galanos, Vassilis & Ilavarasan, , 2021. "Artificial Intelligence (AI): Multidisciplinary perspectives on emerging challenges, opportunities, and agenda for research, practice and policy," International Journal of Information Management, Elsevier, vol. 57(C).
    2. Shuai Wang & Xin Huang & Mengyue Xia & Xing Shi, 2024. "Does Artificial Intelligence Promote Firms’ Innovation Efficiency: Evidence from the Robot Application," Journal of the Knowledge Economy, Springer;Portland International Center for Management of Engineering and Technology (PICMET), vol. 15(4), pages 16373-16394, December.
    3. Lisha, Liu & Mousa, Saeed & Arnone, Gioia & Muda, Iskandar & Huerta-Soto, Rosario & Shiming, Zhai, 2023. "Natural resources, green innovation, fintech, and sustainability: A fresh insight from BRICS," Resources Policy, Elsevier, vol. 80(C).
    4. Gloria Cicerone & Alessandra Faggian & Sandro Montresor & Francesco Rentocchini, 2023. "Regional artificial intelligence and the geography of environmental technologies: does local AI knowledge help regional green-tech specialization?," Regional Studies, Taylor & Francis Journals, vol. 57(2), pages 330-343, February.
    5. Wang, Shaohui & Yong, Yanlan & Liu, Xizhang & Wang, Yunliang, 2024. "How Fintech mitigates credit mismatches to promote green innovation: Evidence from Chinese listed enterprises," International Review of Financial Analysis, Elsevier, vol. 96(PB).
    6. Liu, Jun & Chang, Huihong & Forrest, Jeffrey Yi-Lin & Yang, Baohua, 2020. "Influence of artificial intelligence on technological innovation: Evidence from the panel data of china's manufacturing sectors," Technological Forecasting and Social Change, Elsevier, vol. 158(C).
    7. Culot, Giovanna & Nassimbeni, Guido & Orzes, Guido & Sartor, Marco, 2020. "Behind the definition of Industry 4.0: Analysis and open questions," International Journal of Production Economics, Elsevier, vol. 226(C).
    8. Li, Dongkun & Chen, Yufeng & Miao, Jiafeng, 2022. "Does ICT create a new driving force for manufacturing?—Evidence from Chinese manufacturing firms," Telecommunications Policy, Elsevier, vol. 46(1).
    9. Bonsall, Samuel B. & Green, Jeremiah & Muller, Karl A., 2020. "Market uncertainty and the importance of media coverage at earnings announcements," Journal of Accounting and Economics, Elsevier, vol. 69(1).
    10. Zhao, Zhiqi & Yue, Yong & Wang, Wangshuai, 2024. "Unintended consequences of tax incentives on firms' human capital composition: Evidence from China," China Economic Review, Elsevier, vol. 84(C).
    11. Ma, Dan & Zhu, Qing, 2022. "Innovation in emerging economies: Research on the digital economy driving high-quality green development," Journal of Business Research, Elsevier, vol. 145(C), pages 801-813.
    12. Bag, Surajit & Pretorius, Jan Ham Christiaan & Gupta, Shivam & Dwivedi, Yogesh K., 2021. "Role of institutional pressures and resources in the adoption of big data analytics powered artificial intelligence, sustainable manufacturing practices and circular economy capabilities," Technological Forecasting and Social Change, Elsevier, vol. 163(C).
    13. Yan Xue & Caidong Jiang & Yunxia Guo & Jianmin Liu & Haitao Wu & Yu Hao, 2022. "Corporate Social Responsibility and High-quality Development: Do Green Innovation, Environmental Investment and Corporate Governance Matter?," Emerging Markets Finance and Trade, Taylor & Francis Journals, vol. 58(11), pages 3191-3214, September.
    14. Aqueeb Sohail Shaik & Safiya Alshibani & Girish Jain & Bhumika Gupta & Ankit Mehrotra, 2024. "Artificial intelligence (AI)‐driven strategic business model innovations in small‐ and medium‐sized enterprises. Insights on technological and strategic enablers for carbon neutral businesses," Post-Print hal-04304157, HAL.
    15. Nils Grashof & Alexander Kopka, 2023. "Artificial intelligence and radical innovation: an opportunity for all companies?," Small Business Economics, Springer, vol. 61(2), pages 771-797, August.
    16. Zeng, Hongjun & Abedin, Mohammad Zoynul & Zhou, Xiangjing & Lu, Ran, 2024. "Measuring the extreme linkages and time-frequency co-movements among artificial intelligence and clean energy indices," International Review of Financial Analysis, Elsevier, vol. 92(C).
    17. Maya Novitasari & Zeplin Jiwa Husada Tarigan, 2022. "The Role of Green Innovation in the Effect of Corporate Social Responsibility on Firm Performance," Economies, MDPI, vol. 10(5), pages 1-19, May.
    18. Julian F. Kölbel & Timo Busch & Leonhardt M. Jancso, 2017. "How Media Coverage of Corporate Social Irresponsibility Increases Financial Risk," Strategic Management Journal, Wiley Blackwell, vol. 38(11), pages 2266-2284, November.
    19. Tao, Weiliang & Weng, Shimei & Chen, Xueli & ALHussan, Fawaz Baddar & Song, Malin, 2024. "Artificial intelligence-driven transformations in low-carbon energy structure: Evidence from China," Energy Economics, Elsevier, vol. 136(C).
    20. Liu, Xiaojing & Tian, Haiyan & Leng, Ziwen & Ma, Yue, 2025. "Financial technology, financing constraints, and future industrial development," Finance Research Letters, Elsevier, vol. 73(C).
    21. Ivanov, Dmitry, 2023. "Intelligent digital twin (iDT) for supply chain stress-testing, resilience, and viability," International Journal of Production Economics, Elsevier, vol. 263(C).
    22. Sanjay Kumar Singh & Manlio Del Giudice & Charbel Jose Chiappetta Jabbour & Hengky Latan & Amrik Singh Sohal, 2022. "Stakeholder pressure, green innovation, and performance in small and medium‐sized enterprises: The role of green dynamic capabilities," Business Strategy and the Environment, Wiley Blackwell, vol. 31(1), pages 500-514, January.
    23. Guo, Xiaoxu & Liu, Nan, 2024. "The industrial internet and green technology innovation," Finance Research Letters, Elsevier, vol. 66(C).
    24. Ho, Kung-Cheng & Shen, Xixi & Yan, Cheng & Hu, Xiang, 2023. "Influence of green innovation on disclosure quality: Mediating role of media attention," Technological Forecasting and Social Change, Elsevier, vol. 188(C).
    25. Ignat Kulkov & Julia Kulkova & Rene Rohrbeck & Loick Menvielle & Valtteri Kaartemo & Hannu Makkonen, 2024. "Artificial intelligence ‐ driven sustainable development: Examining organizational, technical, and processing approaches to achieving global goals," Sustainable Development, John Wiley & Sons, Ltd., vol. 32(3), pages 2253-2267, June.
    26. Dong, Zhenlin & Xin, Zijun & Liu, Dewen & Yu, Fangkun, 2024. "The impact of artificial intelligence application on company environmental investment in Chinese manufacturing companies," International Review of Financial Analysis, Elsevier, vol. 95(PB).
    27. Babina, Tania & Fedyk, Anastassia & He, Alex & Hodson, James, 2024. "Artificial intelligence, firm growth, and product innovation," Journal of Financial Economics, Elsevier, vol. 151(C).
    28. Frank, Alejandro Germán & Dalenogare, Lucas Santos & Ayala, Néstor Fabián, 2019. "Industry 4.0 technologies: Implementation patterns in manufacturing companies," International Journal of Production Economics, Elsevier, vol. 210(C), pages 15-26.
    29. Ding, Xiaoya (Sara) & Guo, Mengmeng & Kuai, Yicheng & Niu, Geng, 2023. "Social trust and firm innovation: Evidence from China," International Review of Economics & Finance, Elsevier, vol. 84(C), pages 474-493.
    30. Romer, Paul M, 1990. "Endogenous Technological Change," Journal of Political Economy, University of Chicago Press, vol. 98(5), pages 71-102, October.
    31. Hu, Zhifei & Liu, Xihe & Li, Xinyu & Wu, Jun, 2024. "How does vertical fiscal imbalance affect corporate green innovation? Empirical evidence from China," International Review of Financial Analysis, Elsevier, vol. 96(PA).
    32. Wilbur Chen & Suraj Srinivasan, 2024. "Going digital: implications for firm value and performance," Review of Accounting Studies, Springer, vol. 29(2), pages 1619-1665, June.
    33. Awan, Ashar & Abbasi, Kashif Raza & Rej, Soumen & Bandyopadhyay, Arunava & Lv, Kangjuan, 2022. "The impact of renewable energy, internet use and foreign direct investment on carbon dioxide emissions: A method of moments quantile analysis," Renewable Energy, Elsevier, vol. 189(C), pages 454-466.
    34. Aqueeb Sohail Shaik & Safiya Mukhtar Alshibani & Girish Jain & Bhumika Gupta & Ankit Mehrotra, 2024. "Artificial intelligence (AI)‐driven strategic business model innovations in small‐ and medium‐sized enterprises. Insights on technological and strategic enablers for carbon neutral businesses," Business Strategy and the Environment, Wiley Blackwell, vol. 33(4), pages 2731-2751, May.
    35. Filiou, Despoina & Kesidou, Effie & Wu, Lichao, 2023. "Are smart cities green? The role of environmental and digital policies for Eco-innovation in China," World Development, Elsevier, vol. 165(C).
    36. Calabrese, Armando & Costa, Roberta & Tiburzi, Luigi & Brem, Alexander, 2023. "Merging two revolutions: A human-artificial intelligence method to study how sustainability and Industry 4.0 are intertwined," Technological Forecasting and Social Change, Elsevier, vol. 188(C).
    37. Yang, Haochang & Li, Lianshui & Liu, Yaobin, 2022. "The effect of manufacturing intelligence on green innovation performance in China," Technological Forecasting and Social Change, Elsevier, vol. 178(C).
    38. Gao, Qiang & Cheng, Changming & Sun, Guanglin, 2023. "Big data application, factor allocation, and green innovation in Chinese manufacturing enterprises," Technological Forecasting and Social Change, Elsevier, vol. 192(C).
    39. Sun, Guanglin & Fang, Jiming & Li, Ting & Ai, Yongfang, 2024. "Effects of climate policy uncertainty on green innovation in Chinese enterprises," International Review of Financial Analysis, Elsevier, vol. 91(C).
    40. Davis, Lance & North, Douglass, 1970. "Institutional Change and American Economic Growth: A First Step Towards a Theory of Institutional Innovation," The Journal of Economic History, Cambridge University Press, vol. 30(1), pages 131-149, March.
    41. An, Zhe & Chen, Chen & Naiker, Vic & Wang, Jun, 2020. "Does media coverage deter firms from withholding bad news? Evidence from stock price crash risk," Journal of Corporate Finance, Elsevier, vol. 64(C).
    42. Ruiqi Wei & Catherine Pardo, 2022. "Artificial intelligence and SMEs : How can B2B SMEs leverage AI platforms to integrate AI technologies?," Post-Print hal-04325639, HAL.
    43. Chowdhury, Soumyadeb & Budhwar, Pawan & Dey, Prasanta Kumar & Joel-Edgar, Sian & Abadie, Amelie, 2022. "AI-employee collaboration and business performance: Integrating knowledge-based view, socio-technical systems and organisational socialisation framework," Journal of Business Research, Elsevier, vol. 144(C), pages 31-49.
    44. Liu, Xukang & Ma, Chaoqun & Ren, Yi-Shuai, 2024. "How AI powers ESG performance in China's digital frontier?," Finance Research Letters, Elsevier, vol. 70(C).
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Wei Sun & Lidan Zhang, 2025. "The Influence of the National Pilot Zone for Ecological Conservation on the ESG Performance of Heavily Polluting Enterprises: An Empirical Investigation Using the Double-Difference Method," Sustainability, MDPI, vol. 17(11), pages 1-22, June.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Lee, Chien-Chiang & Qin, Shuai & Li, Yaya, 2022. "Does industrial robot application promote green technology innovation in the manufacturing industry?," Technological Forecasting and Social Change, Elsevier, vol. 183(C).
    2. Niu, Xiaotong & Lin, Changao & He, Shanshan & Yang, Youcai, 2025. "Artificial intelligence and enterprise pollution emissions: From the perspective of energy transition," Energy Economics, Elsevier, vol. 144(C).
    3. Wang, Jianlong & Liu, Yong & Wang, Weilong & Wu, Haitao, 2024. "Does artificial intelligence improve enterprise carbon emission performance? Evidence from an intelligent transformation policy in China," Technology in Society, Elsevier, vol. 79(C).
    4. D'Al, Francesco & Santarelli, Enrico & Vivarelli, Marco, 2024. "The KSTE+I approach and the advent of AI technologies: evidence from the European regions," GLO Discussion Paper Series 1473, Global Labor Organization (GLO).
    5. Francesco D'Alessandro & Enrico Santarelli & Marco Vivarelli, 2024. "The KSTE+I approach and the AI technologies," DISCE - Working Papers del Dipartimento di Politica Economica dipe0039, Università Cattolica del Sacro Cuore, Dipartimenti e Istituti di Scienze Economiche (DISCE).
    6. D’Alessandro, Francesco & Santarelli, Enrico & Vivarelli, Marco, 2024. "The Knowledge Spillover Theory of Entrepreneurship and Innovation (KSTE+I) Approach and the Advent of AI Technologies: Evidence from the European Regions," IZA Discussion Papers 17206, Institute of Labor Economics (IZA).
    7. Wu, Yifan & Yuan, Yiming & Song, Xueyin, 2025. "The impact of AI adoption on R&D productivity: Evidence from Chinese pharmaceutical manufacturing industry," Journal of Asian Economics, Elsevier, vol. 97(C).
    8. Fu, Tong & Qiu, Zhaoxuan & Yang, Xiangyang & Li, Zijun, 2024. "The impact of artificial intelligence on green technology cycles in China," Technological Forecasting and Social Change, Elsevier, vol. 209(C).
    9. Yogesh K. Dwivedi & A. Sharma & Nripendra P. Rana & M. Giannakis & P. Goel & Vincent Dutot, 2023. "Evolution of Artificial Intelligence Research in Technological Forecasting and Social Change: Research Topics, Trends, and Future Directions," Post-Print hal-04292607, HAL.
    10. Song, Yang & Zhang, Yue & Zhang, Zhipeng & Sahut, Jean-Michel, 2025. "Artificial intelligence, digital finance, and green innovation," Global Finance Journal, Elsevier, vol. 64(C).
    11. Zhong, Xi & She, Jianquan & Wu, Xiaojie, 2024. "Tech for social good: Artificial intelligence and workplace safety," Technology in Society, Elsevier, vol. 79(C).
    12. Chen, Pengyu & Chu, Zhongzhu & Zhao, Miao, 2024. "The Road to corporate sustainability: The importance of artificial intelligence," Technology in Society, Elsevier, vol. 76(C).
    13. Zhang, Haonan & Yu, Guanchen, 2024. "Reducing costs or increasing efficiency? Unveiling the effects and mechanisms of the digital economy on sustained green innovation," International Review of Economics & Finance, Elsevier, vol. 96(PB).
    14. Ma, Dechao & Wu, Weiwei, 2024. "Does artificial intelligence drive technology convergence? Evidence from Chinese manufacturing companies," Technology in Society, Elsevier, vol. 79(C).
    15. Qiang Wang & Tingting Sun & Rongrong Li, 2025. "Does Artificial Intelligence (AI) enhance green economy efficiency? The role of green finance, trade openness, and R&D investment," Palgrave Communications, Palgrave Macmillan, vol. 12(1), pages 1-22, December.
    16. Li, Fei & Zhang, Nana, 2025. "Digital transformation, innovation investment and quality," Finance Research Letters, Elsevier, vol. 75(C).
    17. Genghua Tang & Hongxun Mai, 2022. "How Does Manufacturing Intelligentization Influence Innovation in China from a Nonlinear Perspective and Economic Servitization Background?," Sustainability, MDPI, vol. 14(21), pages 1-16, October.
    18. Licheng Yang & Shijie Song & Chunlin Liu, 2024. "Green signals: The impact of environmental protection support policies on firms' green innovation," Business Strategy and the Environment, Wiley Blackwell, vol. 33(4), pages 3258-3278, May.
    19. Robertson, Jeandri & Botha, Elsamari & Oosthuizen, Kim & Montecchi, Matteo, 2025. "Managing change when integrating artificial intelligence (AI) into the retail value chain: The AI implementation compass," Journal of Business Research, Elsevier, vol. 189(C).
    20. Wang, Ke-Liang & Sun, Ting-Ting & Xu, Ru-Yu & Miao, Zhuang & Cheng, Yun-He, 2022. "How does internet development promote urban green innovation efficiency? Evidence from China," Technological Forecasting and Social Change, Elsevier, vol. 184(C).

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:reveco:v:99:y:2025:i:c:s1059056025001704. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/locate/inca/620165 .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.