Energy transition policies and the corporate AI adoption: Evidence from new energy cities

This paper investigates the impact of urban energy transition policies on the adoption of AI applications by enterprises, utilizing evidence from China's New Energy Demonstration Cities (NEDC) initiative. Using a difference-in-differences methodology on 3024 A-share-listed companies from 2005 to 2022, we estimate the causal effect of the policy on enterprises' adoption of AI. The findings indicate that urban energy transition policies considerably expedite corporate AI adoption, with the policy increasing the likelihood of firm-level AI adoption by roughly 0.1238. Mechanism analyses demonstrate that the transition strategy primarily facilitates AI adoption by increasing R&D spending, fostering AI innovation, and increasing the proportion of highly educated personnel. A heterogeneity study indicates more pronounced consequences for private organizations, high-tech enterprises, low-pollution firms, and companies operating in less regulated contexts. The findings indicate that urban energy transition significantly accelerates AI adoption at the corporate level, providing policy recommendations for integrating energy transition activities with digital transformation plans.