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Does artificial intelligence deter greenwashing?

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Listed:
  • Li, Donghui
  • Zhang, Zhanxiang
  • Gao, Xin

Abstract

Employing 6,940 observations of 1,205 Chinese-listed firms from 2012 to 2022, we provide robust evidence that Artificial Intelligence (hereafter AI) inhibits greenwashing. We further find that AI achieves this effect by mitigating agency problems, easing financing constraints, and increasing external attention. In addition, the positive impact of AI in curbing greenwashing is more notable in politically unaffiliated firms, those with fewer female directors, or those with weaker equity incentives. Our findings highlight AI's crucial role in combating greenwashing and maintaining capital market order.

Suggested Citation

  • Li, Donghui & Zhang, Zhanxiang & Gao, Xin, 2024. "Does artificial intelligence deter greenwashing?," Finance Research Letters, Elsevier, vol. 67(PB).
    • Handle: RePEc:eee:finlet:v:67:y:2024:i:pb:s154461232400984x
    DOI: 10.1016/j.frl.2024.105954
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    More about this item

    Keywords

    Artificial intelligence; Greenwashing; ESG performance; Corporate governance;
    All these keywords.

    JEL classification:

    • G34 - Financial Economics - - Corporate Finance and Governance - - - Mergers; Acquisitions; Restructuring; Corporate Governance
    • M14 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - Corporate Culture; Diversity; Social Responsibility
    • Q56 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environment and Development; Environment and Trade; Sustainability; Environmental Accounts and Accounting; Environmental Equity; Population Growth

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