Abstract
Employing 6,940 observations of 1,205 Chinese-listed firms from 2012 to 2022, we provide robust evidence that Artificial Intelligence (hereafter AI) inhibits greenwashing. We further find that AI achieves this effect by mitigating agency problems, easing financing constraints, and increasing external attention. In addition, the positive impact of AI in curbing greenwashing is more notable in politically unaffiliated firms, those with fewer female directors, or those with weaker equity incentives. Our findings highlight AI's crucial role in combating greenwashing and maintaining capital market order.
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