Intelligent governance? Evidence from the adoption of AI in Chinese A-share firms

In the context of China’s rapidly evolving digital transformation and increasingly complex economic environment, enterprises’ governance challenges have intensified, making it urgent to explore the influence of artificial intelligence (AI) on enhancing corporate governance. Using panel data of Chinese A-share listed firms from 2010 to 2023, this study empirically examines the impact of AI adoption on governance quality. The results reveal that AI significantly improves governance outcomes, with internal control serving as a key mediating mechanism. Moreover, higher industry competition enhances this positive effect, and it also becomes more pronounced in technology-intensive sectors. These findings remain robust across a variety of empirical tests. This study makes three notable contributions. First, it extends the literature by correlating AI adoption with corporate governance rather than solely performance or innovation. Second, it demonstrates the mechanism of internal control in shaping governance outcomes. Third, it reveals the contingent influence of industry characteristics. The results provide practical insights for firms and regulators, indicating that AI should be strategically deployed in governance areas with high information asymmetry and monitoring costs, while regulatory standards should be updated to ensure transparency, accountability, and resilience in AI-assisted governance systems.