When AI meets ethics: unveiling the impact of firm AI innovation on corporate social responsibility

Artificial intelligence (AI) has emerged as a transformative force in modern business. However, its impact on corporate social responsibility (CSR) remains an underexplored domain. The current study establishes the theoretical relationship between AI innovation and firms’ CSR and empirically examines the model. Using a comprehensive dataset of 10,232 firm-year observations from 1790 publicly listed firms, we reveal a positive and strong association between AI innovation and CSR. Furthermore, we explore the moderating roles of market diversification, and organizational scope, demonstrating that the impact of AI innovation on CSR is more pronounced in firms with complex operational structures. Additionally, we find that AI innovation significantly reduces firm social irresponsibility. These insights contribute to both academic discourse and managerial practice by highlighting AI’s potential to drive corporate sustainability while mitigating corporate social misconduct. The study underscores the necessity of integrating AI into strategic CSR frameworks to enhance long-term value creation.