Artificial Intelligence Application, Corporate Carbon Performance and Sustainable Development: Evidence from Chinese Listed Firms

Based on 24,073 firm-year observations of Chinese A-share listed firms from 2009 to 2023, this paper investigates the effect of artificial intelligence (AI) application on corporate carbon performance, which is defined as operating revenue per unit of CO2 emissions and serves as an integrated indicator capturing both environmental and economic dimensions of sustainable development. Employing a two-way fixed-effects model and instrumental variable estimation, we find that a one-unit increase in the AI index is associated with a 0.586-unit increase in carbon performance, and this result survives a battery of robustness checks. Mechanism analysis identifies two channels: AI alleviates financing constraints (coefficient = −0.002) and promotes green innovation (coefficient = 0.040). Industry competition positively moderates this effect, which is stronger in cities with stronger intellectual property protection, in high-tech industries, and in labor-intensive firms. Further analysis reveals that conservation-oriented AI significantly improves carbon performance (coefficient = 0.612), whereas augmentation-oriented AI has a positive but statistically insignificant coefficient (0.236). These findings underscore the promise of AI in reconciling decarbonization with value creation—a core objective of sustainable development.