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The sustainability payoff of AI: revisiting TFP in corporate and societal performance

Author

Listed:
  • Jian, Wenze
  • Lu, Hang
  • Yang, Zimo
  • Zhong, Ziqi

Abstract

Using data on Chinese A-share listed firms and regions from 2011–2023, this paper employs a difference-in-differences (DID) framework to evaluate the productivity returns to artificial intelligence (AI) application from both firm-level and societal perspectives. The findings are as follows: First, AI intensity significantly increases firms' total factor productivity (TFP). Second, AI intensity significantly increases social TFP. Third, green financial innovation exerts a significant positive mediating effect on the pathway from AI intensity to firm TFP. Fourth, green financial innovation also partially mediates the pathway from AI intensity to social TFP. Substantively, the paper links micro-level firm transformation with macro-level regional performance, providing empirical evidence and policy implications for understanding the transmission mechanism from digitalization to greening to high-quality growth.

Suggested Citation

  • Jian, Wenze & Lu, Hang & Yang, Zimo & Zhong, Ziqi, 2026. "The sustainability payoff of AI: revisiting TFP in corporate and societal performance," LSE Research Online Documents on Economics 130473, London School of Economics and Political Science, LSE Library.
    • Handle: RePEc:ehl:lserod:130473
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    JEL classification:

    • F3 - International Economics - - International Finance
    • G3 - Financial Economics - - Corporate Finance and Governance
    • J50 - Labor and Demographic Economics - - Labor-Management Relations, Trade Unions, and Collective Bargaining - - - General

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