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Does artificial intelligence facilitate the balancing of short-term returns and long-term growth in firms? Evidence from China

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  • Liang, Lin
  • Sun, Ruxue

Abstract

Whether Artificial Intelligence (AI), as a profound global technological force, can enable firms to achieve an effective balance between short-term economic returns and long-term sustainable growth remains a critical and unresolved question. Drawing on dynamic capability theory, this paper develops a theoretical model following the pathway: AI (capability stimulation) → organizational resilience (capability formation) → strategic change (capability exertion) → balance between short-term returns and long-term growth (BLC; firm outcomes), thereby systematically investigating the impact of AI on BLC and its underlying mechanisms. Using a sample of Chinese Shanghai and Shenzhen A-share companies from 2007 to 2023, results show that AI has a significantly positive effect on BLC, and this finding remains valid and robust across a series of tests. Organizational resilience and strategic change act as both parallel mediators and a chain mediator between AI and BLC. Furthermore, the impact of AI on BLC varies significantly across firms with different levels of economic development, industry technicality, size, ownership status, life cycle stage, and leader type. These findings offer both theoretical insights and practical implications for the intelligent transformation of firms.

Suggested Citation

  • Liang, Lin & Sun, Ruxue, 2026. "Does artificial intelligence facilitate the balancing of short-term returns and long-term growth in firms? Evidence from China," Technological Forecasting and Social Change, Elsevier, vol. 223(C).
    • Handle: RePEc:eee:tefoso:v:223:y:2026:i:c:s0040162525004913
    DOI: 10.1016/j.techfore.2025.124460
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