AI Adoption and Firm Performance: Management versus IT
40 Pages Posted: 14 Sep 2020
Date Written: July 21, 2020
We examine the impact of AI adoption on firm growth, productivity, and investment decisions and explore whether the impact on firm size and policies stems from AI adoption among management ranks or IT specialists. We measure the firm-level AI adoption using the demand for AI-related skills in online job postings. First, we document a positive association between the firm-level AI adoption and the firm's size, Capex, R&D, and total investments. We do not find robust relationships with productivity measures. Second, we find that the adoption of AI skills among managers drives the positive association with growth in sales and market capitalization, as well as with R&D and Capex. AI adoption among IT specialists does not show any robust association with firm outcomes.
Keywords: artificial intelligence, machine learning, productivity, technology adoption, management
JEL Classification: D22, D24, G31, G32, J24, M15, M2, O33
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