Artificial intelligence, risk and complementary assets: firm-level evidence from France

The Institute of Economics will hold a seminar meeting as part of its Seminar Series on Tuesday, May 21, 2024: Luca Fontanelli from University of Brescia will present the paper “Artificial intelligence, risk and complementary assets: firm-level evidence from France".

Abstract:

In this study, we examine the relationship between the use of artificial intelligence (AI) by firms and risk,  measured as the firm-level volatility of productivity growth rates. Our findings support a positive association between AI use and risk. To address potential endogeneity issues, we employ a Coarsened Exact Matching design, providing evidence that the observed relationship is causal. Furthermore, we explore potential mediating factors between AI and risk and find that AI users with larger shares of ICT workers are associated with lower risk. Additionally, we distinguish between AI buyers (i.e., firms employing AI technologies developed by external providers) and AI developers (i.e., firms utilizing internally created AI systems). Our results indicate that the positive relationship between AI use and risk is primarily driven by AI buyers, with no significant association found for AI developers. In conclusion, our work suggests that the use of AI increases the risk only for firms that do not leverage complementary assets.

The Seminar will be held in Aula 3.