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The Impact of Artificial Intelligence Adoption on Corporate Green Innovation: Mediating Effect of Financial Constraints

In: Proceedings of the 2025 International Conference on Financial Innovation and Marketing Management (FIMM 2025)

Author

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  • Yichi Wang

    (Southwestern University of Finance and Economics, School of Accounting)

Abstract

This study investigates the impact of artificial intelligence adoption on corporate green innovation in the context of Chinese A-share listed companies from 2014 to 2023. Drawing on signaling theory and information asymmetry, this study examined how AI adoption effect green innovation, through the mediating role of financial constraint. Using panel fixed-effects regressions, the study finds that AI adoption significantly promotes green patent activity. Mediation analysis reveals that AI adoption alleviates firms’ financial constraints, thereby enabling greater investment in sustainable innovation. Furthermore, heterogeneity analysis shows that the effect is more pronounced in state-owned enterprises, which are more troubled by information asymmetry. Robustness tests using instrumental variables confirm the causal inference. These findings highlight the value of AI not only in enhancing operational efficiency but also in improving financial flexibility and facilitating green transformation in corporations. The study underscores the potential of AI as a strategic tool promoting sustainable innovation, offering practical implications for both corporate decision-making and policy design.

Suggested Citation

  • Yichi Wang, 2025. "The Impact of Artificial Intelligence Adoption on Corporate Green Innovation: Mediating Effect of Financial Constraints," Advances in Economics, Business and Management Research, in: Maizaitulaidawati Md Husin (ed.), Proceedings of the 2025 International Conference on Financial Innovation and Marketing Management (FIMM 2025), pages 321-332, Springer.
    • Handle: RePEc:spr:advbcp:978-94-6463-874-5_40
    DOI: 10.2991/978-94-6463-874-5_40
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