Artificial intelligence and firm-level productivity

Artificial Intelligence (AI) is often regarded as the next general-purpose technology with a rapid, penetrating, and far-reaching use over a broad number of industrial sectors. The main feature of new general-purpose technology is to enable new ways of production that may increase productivity. Howe...

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Bibliographic Details
Published in:Journal of economic behavior & organization Vol. 211; pp. 188 - 205
Main Authors: Czarnitzki, Dirk, Fernández, Gastón P., Rammer, Christian
Format: Journal Article
Language:English
Published: Elsevier B.V 01.07.2023
Subjects:
Artificial Intelligence
CIS data
Innovation
Productivity
Productivity
M15
Innovation
O14
CIS data
Artificial Intelligence
O31
O33
L25
ISSN:0167-2681
Online Access:Get full text
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Summary:Artificial Intelligence (AI) is often regarded as the next general-purpose technology with a rapid, penetrating, and far-reaching use over a broad number of industrial sectors. The main feature of new general-purpose technology is to enable new ways of production that may increase productivity. However, to date, only a few studies have investigated the likely productivity effects of AI at the firm-level, presumably due to limited data availability. We exploit unique survey data on firms’ adoption of AI technology and estimate its productivity effects with a sample of German firms. We employ both a cross-sectional dataset and a panel database. To address the potential endogeneity of AI adoption, we also implement IV estimators. We find positive and significant associations between the use of AI and firm productivity. This finding holds for different measures of AI usage, i.e., an indicator variable of AI adoption, and the intensity with which firms use AI methods in their business processes.
ISSN:0167-2681
DOI:10.1016/j.jebo.2023.05.008