How Does Artificial Intelligence Change Carbon Emission Intensity? A Firm Lifecycle Perspective

Qiang Wu and Peng Zhou ()
Additional contact information
Peng Zhou: Cardiff Business School, Cardiff University, http://www.cardiff.ac.uk/people/view/609689-zhou-peng

No E2025/9, Cardiff Economics Working Papers from Cardiff University, Cardiff Business School, Economics Section

Abstract: Artificial intelligence (AI) is crucial in achieving the carbon peak and neutrality goals and mitigating climate change. Although previous studies have explored cross-sectional differences in corporate carbon emissions, temporal heterogeneities in firm lifecycles have been overlooked. Therefore, this study investigates the effect of AI adoption on carbon emission intensity over firm lifecycles and the micro-level mechanisms of this effect. This study examines panel data from Chinese listed companies (2010–2021) using a two-way fixed-effects model and the difference-in-differences method. The empirical results demonstrate that AI significantly reduces enterprises’ carbon emission intensity. However, this effect is mainly observed in growth-stage enterprises and not in decline-stage enterprises. The mechanism analysis reveals that AI primarily reduces enterprises’ carbon emission intensity by improving productivity and promoting innovation. The effect on productivity is particularly evident in growth-stage enterprises, whereas the effect on innovation is dominant in decline-stage enterprises. Heterogeneity tests indicate that the effect on state-owned enterprises, medium-sized enterprises, the manufacturing sector, heavily polluting industries, non-high-tech industries, and capital-intensive industries is more pronounced than that on other enterprises. These findings suggest that enterprises should actively adopt AI, and differentiated AI adoption strategies should be formulated based on the needs of enterprises at different lifecycle stages.

Keywords: artificial intelligence; carbon emission intensity; firm lifecycle; productivity (search for similar items in EconPapers)
JEL-codes: O31 O32 O33 (search for similar items in EconPapers)
Pages: 29 pages
Date: 2025-03
New Economics Papers: this item is included in nep-ain
References: Add references at CitEc
Citations:

Downloads: (external link)
http://carbsecon.com/wp/E2025_9.pdf (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:cdf:wpaper:2025/9

Access Statistics for this paper

More papers in Cardiff Economics Working Papers from Cardiff University, Cardiff Business School, Economics Section Contact information at EDIRC.
Bibliographic data for series maintained by Yongdeng Xu ().