AI adoption and ESG performance: Evidence from China

As artificial intelligence (AI) technologies become deeply integrated into corporate operations and ESG performance emerges as a core indicator of corporate sustainability, investigating the relationship between AI adoption and corporate ESG performance, along with its underlying impact mechanisms, holds significant theoretical and practical importance. This study empirically examines the impact of AI adoption on corporate ESG performance using a sample of Chinese A-share listed companies from 2015 to 2023. Employing panel fixed effects models and mediation analysis, results indicate that AI adoption significantly enhances corporate ESG performance through three critical pathways: financing constraint alleviation, external oversight enhancement, and information disclosure improvement. Heterogeneity analysis reveals that the positive impact of AI is more pronounced in non-state-owned enterprises, firms with optimistic managerial sentiment, high-polluting industries, and high-tech sectors. These findings contribute to the technology-sustainability literature by developing an integrated theoretical framework combining the resource-based view and stakeholder theory, and by identifying specific transmission mechanisms linking AI to ESG outcomes. Practically, the results provide valuable insights for policymakers implementing targeted AI policies, corporate managers pursuing strategic AI adoption, and investors incorporating AI metrics into sustainable investment decisions.