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The impact of corporate artificial intelligence on financial risk: Evidence from China

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  • Xin, Wenhui

Abstract

In this study, we use data from Chinese A-share listed companies from 2010 to 2023 and construct an AI-related keyword index based on text analysis to empirically investigate the impact of AI on corporate financial risk. Our results show that artificial intelligence can significantly reduce corporate financial risk, mainly by alleviating corporate financing constraints and inefficient investment. Further heterogeneity analysis indicates that the effect of AI on reducing financial risk is more significant in non-state-owned enterprises, small-sized firms, and firms with low leverage.

Suggested Citation

  • Xin, Wenhui, 2025. "The impact of corporate artificial intelligence on financial risk: Evidence from China," Finance Research Letters, Elsevier, vol. 81(C).
    • Handle: RePEc:eee:finlet:v:81:y:2025:i:c:s1544612325006956
    DOI: 10.1016/j.frl.2025.107435
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    References listed on IDEAS

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    4. Shi, Yu & Wu, Tong & Qin, Chuan & Liu, Bailu, 2025. "The value-creating potential of AI: A multi-dimensional analysis of effects and mechanisms," International Review of Financial Analysis, Elsevier, vol. 108(PB).

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