The sustainability payoff of AI: revisiting TFP in corporate and societal performance

Wenze Jian, Hang Lu, Zimo Yang and Ziqi Zhong

LSE Research Online Documents on Economics from London School of Economics and Political Science, LSE Library

Abstract: Using data on Chinese A-share listed firms and regions from 2011–2023, this paper employs a difference-in-differences (DID) framework to evaluate the productivity returns to artificial intelligence (AI) application from both firm-level and societal perspectives. The findings are as follows: First, AI intensity significantly increases firms' total factor productivity (TFP). Second, AI intensity significantly increases social TFP. Third, green financial innovation exerts a significant positive mediating effect on the pathway from AI intensity to firm TFP. Fourth, green financial innovation also partially mediates the pathway from AI intensity to social TFP. Substantively, the paper links micro-level firm transformation with macro-level regional performance, providing empirical evidence and policy implications for understanding the transmission mechanism from digitalization to greening to high-quality growth.

Keywords: AI intensity; TFP; green financial innovation (search for similar items in EconPapers)
JEL-codes: F3 G3 J50 (search for similar items in EconPapers)
Pages: 7 pages
Date: 2026-02-28
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Published in International Review of Financial Analysis, 28, February, 2026, 110. ISSN: 1057-5219

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