Artificial intelligence and corporate innovation in small and medium-sized enterprises

As a necessary technical means to improve new productivity in the digital economy era, artificial intelligence (AI) may be a key factor in promoting high-quality innovation in enterprises due to its powerful ability to search, configure, and process information. Based on this, we analyze officially defined small and medium-sized enterprises listed on the Shanghai and Shenzhen A-share markets from 2012 to 2024, using the classification standards issued by the Ministry of Industry and Information Technology of China. We employ methods such as panel fixed effects models to empirically investigate the impact of artificial intelligence applications on corporate high-quality innovation. The study found that artificial intelligence applications can help promote high-quality innovation in enterprises, and this conclusion remains valid after a series of robustness tests. In terms of impact mechanisms, artificial intelligence applications have produced both horizontal and vertical external effects, empowering companies to innovate with high quality through various pathways, including introducing external knowledge to break path dependencies, promoting cross-border integration, optimizing human capital structures, and enhancing corporate R&D efficiency. Heterogeneity analysis shows that the impact of artificial intelligence on high-quality innovation of enterprises is more obvious in enterprises with higher knowledge stock, higher market competition, more active strategic orientation and stronger digital culture. This article deepens our understanding of the role of AI in small and medium-sized enterprises’ innovation. It provides suggestions on how to create an innovation-enhancing cycle between AI and enterprise departments, generating further innovation in application areas.