The impact of artificial intelligence on firms’ energy and resource efficiency: Empirical evidence from China

Abstract

As a strategic technology, artificial intelligence is leading a new round of technological revolution and industrial upgrading that plays an essential role in cultivating emerging industries. This paper employs robot application data compiled by the IFR (International Federation of Robotics) and Chinese firm-level data to empirically investigate the impact of artificial intelligence applications on the energy and resource efficiency of firms. From 2005 to 2014, the energy efficiency of industrial enterprises had an upward trend, and the level of artificial intelligence showed a significant increase in China. Based on our findings, artificial intelligence has a positive and significant impact on improving the energy and resource efficiency of Chinese firms. Controlling for endogeneity issues, the results are robust. Artificial intelligence affects the energy consumption of enterprises through scale, structural, and efficiency effects. Structural and efficiency effects are greater than the impact of scale effects. Therefore, artificial intelligence saves energy consumption and improves energy and resource efficiency. Regarding considerably increasing energy demands, the development of artificial intelligence offers a unique opportunity to improve the energy and resource efficiency of enterprises, thus adjusting the energy and economic structure of a country.