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Influence of artificial intelligence applications on total factor productivity of enterprises—evidence from textual analysis of annual reports of Chinese-listed companies

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  • Yilin Zhong
  • Feng Xu
  • Longpeng Zhang

Abstract

Artificial intelligence (AI) empowers the real economy, promotes intelligent transformation, and upgrades enterprises. However, whether AI applications improve enterprises’ total factor productivity (TFP) in developing countries remains unknown. Based on a textual analysis of the annual reports of Chinese A-share listed companies, we constructed indicators to measure AI applications in companies. Furthermore, the development status and influencing factors of AI applications in Chinese enterprises were explored, and the influence of AI applications on TFP was examined. The results reveal that the probability of AI application varies across enterprises. Large enterprises with a low proportion of fixed assets and high profitability are located in highly market-oriented regions and those operating in strongly competitive industries are more likely to apply AI. AI applications can significantly increase TFP, which holds true after a series of robustness tests. This influence is heterogeneous across industries and enterprises, and the positive effects are more pronounced for producer services and high-tech manufacturing, as well as state-owned, large, and labour-intensive enterprises. AI applications increase TFP mainly through technological innovation and by replacing low-end labour.

Suggested Citation

  • Yilin Zhong & Feng Xu & Longpeng Zhang, 2024. "Influence of artificial intelligence applications on total factor productivity of enterprises—evidence from textual analysis of annual reports of Chinese-listed companies," Applied Economics, Taylor & Francis Journals, vol. 56(43), pages 5205-5223, September.
    • Handle: RePEc:taf:applec:v:56:y:2024:i:43:p:5205-5223
    DOI: 10.1080/00036846.2023.2244246
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    Cited by:

    1. Weiteng Shen & Andrianarivo Andriandafiarisoa Ralison Ny Avotra & Xuan Yu & Shunbin Zhong, 2025. "The effect of digitalization on total factor productivity: a dynamic capabilities perspective," Humanities and Social Sciences Communications, Palgrave Macmillan, vol. 12(1), pages 1-14, December.
    2. Xiumin Li & Furong Liang & Yabin Pi & Diexin Chen, 2024. "The impact of R&D factors flow and regional absorptive capacity on China’s economic growth: Theory and evidence," PLOS ONE, Public Library of Science, vol. 19(11), pages 1-23, November.
    3. Zhou, Chaobo & Zhang, Haikuo & Ying, Jinhuika & He, Shouchao & Zhang, Chong & Yan, Jiale, 2025. "Artificial intelligence and green transformation of manufacturing enterprises," International Review of Financial Analysis, Elsevier, vol. 104(PA).
    4. Wang, Miao & Wang, Yiduo & Feng, Chao, 2025. "Artificial intelligence, institutional environment, and corporate green transformation: Evidence from China's resource-based sector," International Review of Economics & Finance, Elsevier, vol. 103(C).
    5. Wu, Weiwei & Zhang, Yifan, 2025. "Artificial intelligence innovation and environmental performance: Unraveling the complex roles of application and method innovation across enterprise sizes," Technological Forecasting and Social Change, Elsevier, vol. 218(C).
    6. Lu Yang & Min Tianwei & Tony Fang, 2025. "Research on the Influence Mechanism of Digital Transformation on the Development of New Quality Productive Forces in Manufacturing Enterprises – Based on the Spatial Perspective," SAGE Open, , vol. 15(4), pages 21582440251, November.
    7. Chen, Yuhang & Zhong, Yilin & Xu, Feng & Zhang, Qinghua, 2025. "Driving environmental, social, and governance excellence: The direct and indirect effects of intelligent transformation," Structural Change and Economic Dynamics, Elsevier, vol. 75(C), pages 313-331.
    8. Ren, Yuheng & Zhang, Jue & Wang, Xin, 2024. "How does data factor utilization stimulate corporate total factor productivity: A discussion of the productivity paradox," International Review of Economics & Finance, Elsevier, vol. 96(PC).
    9. Wang, Yongqin & Liu, Fuxing, 2025. "Impact of artificial intelligence innovation on food company performance," International Review of Financial Analysis, Elsevier, vol. 103(C).
    10. Zhang, Longpeng & Zhang, Xingye, 2025. "Impact of digital government construction on the intelligent transformation of enterprises: Evidence from China," Technological Forecasting and Social Change, Elsevier, vol. 210(C).
    11. Han, Ziteng & Chen, Lingxi & Zhong, Teng, 2025. "Mixed-ownership reform and AI adoption in state-owned enterprises: A pre-registered report," Pacific-Basin Finance Journal, Elsevier, vol. 94(C).
    12. Liu, Shuai & Gao, Lihui & Chen, Mengzhu, 2025. "Artificial intelligence adoption and corporate financial risk," Finance Research Letters, Elsevier, vol. 85(PA).

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