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How does artificial intelligence improve firms' resource allocation efficiency?

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  • Sun, Shuangxuan
  • Zhou, Xiaoyun

Abstract

This study examines the impact of artificial intelligence (AI) implementation on the efficiency of resource allocation within enterprises and analyzes the underlying mechanisms, aiming to provide empirical evidence to elucidate the economic implications of AI in the corporate sector. The study, which utilizes data from Chinese A-share listed companies, reveals that the implementation of AI significantly enhances resource allocation efficiency. Mechanism tests indicate that AI enhances efficiency through two primary avenues: augmenting total factor productivity by optimizing input combinations and fostering technological innovation, and enhancing information transparency through real-time data integration and sophisticated analytics, thereby diminishing information asymmetry. A subsequent study reveals varied impacts, indicating that AI has a more pronounced influence on reducing resource redundancy than on mitigating resource insufficiency. These findings underscore AI's pivotal role in transforming corporate operating methods and resource management, providing insights for managers who utilize AI to improve efficiency and for policymakers advocating AI adoption as a catalyst for economic growth and industrial advancement.

Suggested Citation

  • Sun, Shuangxuan & Zhou, Xiaoyun, 2026. "How does artificial intelligence improve firms' resource allocation efficiency?," Finance Research Letters, Elsevier, vol. 89(C).
    • Handle: RePEc:eee:finlet:v:89:y:2026:i:c:s1544612325025589
    DOI: 10.1016/j.frl.2025.109309
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    References listed on IDEAS

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