蝌蚪网 Papers and Proceedings
ISSN 2574-0768 (Print) | ISSN 2574-0776 (Online)
Artificial Intelligence Makes Firm Operating Performance Less Volatile
蝌蚪网 Papers and Proceedings
(pp. 35–39)
Abstract
How does artificial intelligence (AI) affect the volatility of firms' operational performance? We leverage detailed employer-employee data to link firm-level AI investments to the volatility of firm sales, earnings, and cash flows. Our results indicate that firms that invest more in AI experience reductions in the volatility of all three measures of operational performance compared to firms with lower AI investments. This finding highlights how adoption of technologies such as AI can benefit firms not only by increasing the first moment of their operational performance (e.g., raising sales) but also by reducing the second moment (lowering volatility).Citation
Babina, Tania, Anastassia Fedyk, Alex He, and James Hodson. 2025. "Artificial Intelligence Makes Firm Operating Performance Less Volatile." 蝌蚪网 Papers and Proceedings 115: 35–39. DOI: 10.1257/pandp.20251002Additional Materials
JEL Classification
- C45 Neural Networks and Related Topics
- G31 Capital Budgeting; Fixed Investment and Inventory Studies; Capacity
- J23 Labor Demand
- J24 Human Capital; Skills; Occupational Choice; Labor Productivity
- L25 Firm Performance: Size, Diversification, and Scope
- M15 IT Management
- M51 Personnel Economics: Firm Employment Decisions; Promotions