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AI Innovation and firm-specific risks: the double-edged sword of media and customer focus

Author

Listed:
  • Wang, Xiongjun
  • Zhou, Ping
  • Pan, Yixin
  • Zhou, Yuanyuan

Abstract

The rapid development of artificial intelligence (AI) is profoundly impacting business operations and risk management. As a tool to enhance information processing capabilities and decision-making efficiency, AI is widely applied across various corporate domains such as production, finance, and marketing. However, research on how AI influences firm-specific risks remains limited. This study uses non-financial listed companies in China's A-share market from 2010 to 2022 as the sample, constructs an AI innovation indicator, and empirically analyzes the impact of AI on corporate idiosyncratic risk, while exploring the moderating roles of customer concentration and media attention. The findings reveal that AI innovation significantly reduces corporate idiosyncratic risk, but this effect weakens when customer concentration is high; conversely, when media attention is high, the negative relationship is strengthened. This study reveals the mechanism through which AI functions in risk governance, providing theoretical and practical insights into the evolution of corporate risk structures in the digital technology era.

Suggested Citation

  • Wang, Xiongjun & Zhou, Ping & Pan, Yixin & Zhou, Yuanyuan, 2026. "AI Innovation and firm-specific risks: the double-edged sword of media and customer focus," Finance Research Letters, Elsevier, vol. 89(C).
    • Handle: RePEc:eee:finlet:v:89:y:2026:i:c:s1544612325023906
    DOI: 10.1016/j.frl.2025.109141
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