Tech for a Greener Tomorrow: Driving Environmental Performance in Corporate Landscapes

Environmental performance (EP) is of paramount importance in the corporate world, as organizations are increasingly recognizing the need to integrate sustainability practices into their operations. This study investigates the impact of Artificial Intelligence and its initiative adoption (AIIA) on corporate EP. By analyzing data from Chinese listed firms on the Shanghai and Shenzhen stock exchanges spanning the period from 2010 to 2019. The initial findings of this study indicate that AIIA plays a crucial role in enhancing corporate EP. However, when examining different ownership structures, the impact is found to be significant only in state-owned enterprises (SOEs). Which indicates the potential of AIIA as a catalyst for environmental sustainability practices in the Chinese SOEs landscape. Moreover, this study explores the moderating effects of external supervision provided by Big4 audit firms, analysts, and media. The results demonstrate that Big4 audit firms and analysts play a significant role in enhancing the relationship between AIIA and corporate EP, with their positive moderating effects observed across the overall sample, as well as in both SOEs and non-state-owned enterprises (non-SOEs). Conversely, media supervision does not exhibit a significant moderation effect in this nexus. Overall, study findings are validated after conducting a series of robustness analysis, including instrumental variable methods, and dynamic panel techniques.