Artificial Intelligence Capability and Firm Value: The Mediating Role of Operational Efficiency

Abstract

Based on an empirical study, this research explores the relationship between the capability of Artificial Intelligence (AI) and firm value and the intervening role of operational efficiency. The study, based on Dynamic Capability Theory (DCT) and Resource Based View (RBV), investigates how firms use their own resources, including the AI-related resource and multiple aspects, to create and sustain a competitive advantage by increase in the operational efficiency and ultimately the value of the firm. Data were collected from 350 managers and executives in companies involved in the field of technology using purposive sampling technique. The measurement and structural models were tested using Structural Equation Modeling (SEM) which was done by SmartPLS. The results indicate that the impact of AI capability on the firm value is positive and significant, and that the impact of operational efficiency is relatively high. The results corroborate the findings by other authors regarding the value of AI not only in terms of being adopted, but also using AI to optimize processes—presenting an opportunity for learning in strategic AI management. Theoretical considerations and practical implications are covered as well as directions for future research.