IDEAS home Printed from https://ideas.repec.org/p/imf/imfwpa/2026-180.html

Jurisdictional Capital and AI Regulation: Evidence from the EU AI Act

Author

Listed:
  • Yi Chen
  • Zhe Wang
  • Jing Zhou

Abstract

We study how AI regulation affects firm valuation using the EU Artificial Intelligence Act, the world's first comprehensive AI framework. In an event study around the April 2021 proposal, we find firms combining deeper EU presence with faster AI hiring earned higher announcement returns, suggesting markets value “jurisdictional capital”—experience in the EU regulatory environment helps firms navigate the AI regulation. The effect is stronger for high-risk AI, for firms with stable and concentrated EU presence, or prior compliance experience, unexplained by size, foreign exposure, or lobbying. EU-embedded, AI-expanding firms increase within-firm EU revenue share when peers are less embedded.

Suggested Citation

  • Yi Chen & Zhe Wang & Jing Zhou, 2026. "Jurisdictional Capital and AI Regulation: Evidence from the EU AI Act," IMF Working Papers 2026/180, International Monetary Fund.
    • Handle: RePEc:imf:imfwpa:2026/180
    as

    Download full text from publisher

    File URL: http://www.imf.org/external/pubs/cat/longres.aspx?sk=579178
    Download Restriction: no
    ---><---

    More about this item

    Keywords

    ;
    ;
    ;
    ;

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:imf:imfwpa:2026/180. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Akshay Modi (email available below). General contact details of provider: https://edirc.repec.org/data/imfffus.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.