Technological Innovation, AI, and ESG: A Comprehensive Study on the Firm Life Cycle in Chinese A-Share Firms

Yue Yin; Wei He; Pengran Zhao; Muhammad Waleed Younas

doi:10.5755/j01.ee.37.3.39815

Authors

Yue Yin School of Economics and Finance, Xi’an Jiaotong University, P. R. China
Wei He School of Law, Xi’an Jiaotong University, P. R. China
Pengran Zhao Department of Global Business, Yeungnam University, Republic of Korea
Muhammad Waleed Younas Business School, Shandong Normal University, China

DOI:

https://doi.org/10.5755/j01.ee.37.3.39815

Keywords:

Artificial intelligence, ESG, Environmental, Social, Governance, Firm Life Cycle, Green Innovation

Abstract

Amidst the ongoing artificial intelligence (AI) technology revolution, businesses are increasingly embracing AI and environmental social and governance principles. This integration leads to sustainable business operations, improved efficiency, and enduring value creation to address global challenges. Therefore, this study explores that how AI technology enhance firm ESG performance through firm life cycle stages. By analyzing a sample of Chinese A-share listed firms from 2010-2020, the study primary findings reveal that AI technology significantly improves firm ESG performance, emphasizing the importance of technological advancements in ESG initiatives. Furthermore, the study reveals that the impact of AI on ESG is more pronounced during the growth and mature stages of the firm cycle compared to the introduction, decline and shakeout stages. Additionally, the study investigates this impact through two channels: AI enhances green innovation and firm performance, which in turn enhance ESG performance. Moreover, heterogeneity analysis highlighting a more pronounced effect in non-SOEs compared to SOEs, and in low bank concentration and robustness analysis through 2SLS and PSM.

Author Biographies

Yue Yin, School of Economics and Finance, Xi’an Jiaotong University, P. R. China

Yue Yin is a Ph.D. student in the School of Economics and Finance at Xi’an Jiaotong University, Xi’an, China. Yue Yin’s research interests focus on corporate finance, digital innovation, and sustainable development.
Wei He, School of Law, Xi’an Jiaotong University, P. R. China

Wei He is affiliated with the School of Law at Xi’an Jiaotong University, Xi’an, China. Wei He’s research interests include corporate governance, regulatory policy, and financial law. Wei He is the corresponding author and can be contacted at: heweiv@xjtu.edu.cn.
Pengran Zhao, Department of Global Business, Yeungnam University, Republic of Korea

Pengran Zhao is a Ph.D. student in the Department of Global Business at Yeungnam University, Republic of Korea. His research focuses on various aspects of corporate endeavors such as environmental performance and digitalization.
Muhammad Waleed Younas, Business School, Shandong Normal University, China

Muhammad Waleed Younas holds his Ph.D. from School of Economics and Finance, Xi’an Jiaotong University currently pursuing Post-doctoral from Business School, Shandong Normal University. His main area of interests focuses on financial markets ESG, firm internal control, corporate governance and digital technology such as artificial intelligence. waleed@stu.xjtu.edu.cn.