How Does AI Innovation Development Pilot Zones Improve Green Total Factor Productivity in China? Evidence From Chinese City Level Data

With the growing utilization of artificial intelligence (AI) technologies, AI is starting to emerge as a major force behind green development, helping to reshape the economy in a sustainable and green way. This study takes China’s “National New Generation Artificial Intelligence Innovation and Development Pilot Zones” (AIIDPZ) as a quasi-natural experiment to evaluate their impact on green total factor productivity (GTFP). Using panel data from 280 prefecture-level cities between 2013 and 2023, a difference-in-differences (DID) model identifies a significant and robust policy effect on GTFP improvement. Mechanism analysis reveals that AIIDPZ enhances green innovation primarily through educational expenditure, while also contributing independently by improving electricity efficiency and reducing fixed asset investment. Further heterogeneity analysis shows that the policy’s positive effects are more pronounced in non-resource-based cities, cities with advanced industrial structures, small and medium-sized cities, flat-terrain regions, and locations with underdeveloped internet infrastructure. The findings offer empirical evidence and valuable policy implications for harnessing AI to advance green productivity and low-carbon growth.