How does artificial intelligence change carbon emission intensity? A firm lifecycle perspective

Wu, Qiang and Zhou, Peng ORCID: https://orcid.org/0000-0002-4310-9474 2025. How does artificial intelligence change carbon emission intensity? A firm lifecycle perspective. Applied Economics 10.1080/00036846.2025.2482927

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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.

Item Type:	Article
Date Type:	Published Online
Status:	In Press
Schools:	Schools > Business (Including Economics)
Publisher:	Taylor and Francis Group
ISSN:	0003-6846
Date of First Compliant Deposit:	30 March 2025
Date of Acceptance:	28 March 2025
Last Modified:	16 Apr 2025 10:45
URI:	https://orca.cardiff.ac.uk/id/eprint/177277

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