TY - JOUR
T1 - Looking in the rear-view mirror
T2 - Evidence from artificial intelligence investment, labour market conditions and firm growth
AU - Tingbani, Ishmael
AU - Salia, Samuel
AU - Hartwell, Christopher A.
AU - Alhassan, Yahaya
PY - 2024/2/26
Y1 - 2024/2/26
N2 - This paper presents evidence of the impact of AI investment on firm growth and how the relationship is sensitive to labour market conditions. Using the generalised method of moments (GMM) estimation on 1,950 unique American firms over 1996-2016, we show that a 10% increase in AI investment leads to an increase in firm growth by 0.04%. However, this result is highly sensitive to labour market conditions, as labour productivity can positively impact firm growth, but labour cost and labour share negatively influence firm growth. These results offer original insights into an essential channel via which investment in AI may mediate firm growth.
AB - This paper presents evidence of the impact of AI investment on firm growth and how the relationship is sensitive to labour market conditions. Using the generalised method of moments (GMM) estimation on 1,950 unique American firms over 1996-2016, we show that a 10% increase in AI investment leads to an increase in firm growth by 0.04%. However, this result is highly sensitive to labour market conditions, as labour productivity can positively impact firm growth, but labour cost and labour share negatively influence firm growth. These results offer original insights into an essential channel via which investment in AI may mediate firm growth.
UR - https://www.open-access.bcu.ac.uk/15307/
U2 - 10.1002/ijfe.2945
DO - 10.1002/ijfe.2945
M3 - Article
SN - 1076-9307
JO - International Journal of Finance and Economics
JF - International Journal of Finance and Economics
ER -