Unveiling the role of artificial intelligence in influencing enterprise environmental performance: Evidence from China

Abstract

Motivated by the emerging prospects regarding the integration of artificial intelligence (AI) and cleaner production, we specifically examine the role of AI in affecting enterprises’ environmental performance. Based on a theoretical model and firm-level empirical evidence from China, we reveal that: (1) AI significantly reduces pollution emission intensity and enhances the environmental performance of Chinese enterprises; (2) The key mechanisms driving the effects are the improvement of total factor productivity, the increase in fixed investments dedicated to pollution reduction, and the optimization of factor input structure; (3) These effects are more pronounced in enterprises with stronger environmental restriction, higher factor intensity, and lower financing constraints. As enterprises strive to adopt more sustainable practices, our findings not only showcase how AI becomes a linchpin for achieving cleaner production goals while also serving as a foundation for informed policymaking in the pursuit of environmental responsibility.