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Navigating ESG in the Artificial Intelligence Era: Evidence From AI Pilot Zones in China

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  • Yujie Liu
  • Xinyi Shen

Abstract

Artificial intelligence is reshaping business models, but limited literature explores how ESG evolves in the AI era. This paper regards AI Pilot Zones in China as a quasi‐natural experiment, and adopts the DID approach to investigate its impact on corporate ESG performance. Using the sample of Chinese A‐share listed companies from 2016 to 2022, we find that the AI policy significantly enhances ESG performance. The AI policy improves ESG through promoting corporate AI applications, reducing information asymmetry, and easing financing constraints. Heterogeneity analyses indicate that the policy effects are more pronounced for firms in regions with high institutional quality, non‐state‐owned enterprises, and non‐high‐tech enterprises. Then, we provide evidence supporting the moderating roles of government AI focus and public attention. Finally, further analyses provide granular evidence of corporate environmental and social practices.

Suggested Citation

  • Yujie Liu & Xinyi Shen, 2026. "Navigating ESG in the Artificial Intelligence Era: Evidence From AI Pilot Zones in China," International Studies of Economics, John Wiley & Sons, vol. 21(2), pages 131-146, June.
    • Handle: RePEc:wly:intsec:v:21:y:2026:i:2:p:131-146
    DOI: 10.1002/ise3.70011
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