Artificial intelligence and green innovation: Investigating the effects of executive pay and firm age

Jinfei Zhang

Research in International Business and Finance, 2025, vol. 77, issue PB

Abstract: In the era of global sustainability, corporate green innovation is pivotal to achieving long-term competitiveness. This study explores how artificial intelligence (AI) applications influence firms' green innovation, emphasizing the moderating roles of executive annual salary and firm age. Using panel data from Chinese listed companies (2012–2023), this research uncovers three key findings: (1) AI applications significantly enhance green innovation, demonstrating sustained effects over time; (2) executive incentives, reflected in annual salary, amplify AI's positive impact through strategic decision-making; and (3) firm age moderates AI's effect linearly, with older firms displaying heightened adaptability in leveraging AI for green innovation. This research bridges critical gaps by integrating micro-governance factors and firm lifecycle attributes into the AI–green innovation framework. The findings offer actionable insights for optimizing AI strategies, designing effective executive compensation systems, and tailoring firm-specific innovation policies. This study contributes to the intersection of AI, corporate governance, and sustainable development, offering fresh empirical evidence and practical implications for policymakers and business leaders aiming to foster green innovation in the digital economy.

Keywords: Artificial intelligence; Green innovation; Executive incentives; Firm age; Sustainability; Moderating effects (search for similar items in EconPapers)
Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:eee:riibaf:v:77:y:2025:i:pb:s0275531925002090

DOI: 10.1016/j.ribaf.2025.102953

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