How do corporate governance, artificial intelligence, and innovation interact? Findings from different industries

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Abstract

Research in the field of corporate governance has been exhaustive, and recently many scholars have focused on the relationship between corporate governance attributes and artificial intelligence (AI), corporate governance attributes, and corporate innovation (Asensio-López et al., 2019), however, there are few studies that combine corporate governance, AI, and corporate innovation. This article examines the relationships among corporate governance attributes, AI, and corporate innovation. Adopting a new perspective, we have tried to help resolve this issue using a content-analysis that integrates data from over 50 companies that trade on National Association of Securities Dealers Automated Quotations (NASDAQ) to analyze the relationship between board attributes, the practice of AI and firm innovation for the time 2018–2022. The results suggest that particular aspects of boards, such as board size, board diversity, and ownership concentration show significant correlations with firm AI development and innovation for overall industries, but the levels of associations also vary depending on different innovation measurements and samples considered in specific industries. Corporate governance has more significant variables in the manufacturing and information technology service industries. Moreover, the mediating effects of AI and innovation are examined, respectively. This research offers implications to corporate decision-makers as to how to proceed if the intent is to offer commercialized AI advancements and successful breakthrough innovations.

Keywords: Corporate Governance, Ownership Concentration, Artificial Intelligence, Innovation

Authors’ individual contribution: Conceptualization — R.G. and R.H.; Methodology — R.G. and R.H.; Validation — R.G. and R.H.; Data Analysis — R.G. and R.H.; Investigation — R.G. and R.H.; Writing — R.G. and R.H.

Declaration of conflicting interests: The Authors declare that there is no conflict of interest.

JEL Classification: M41, M31

Received: 18.12.2023
Accepted: 11.03.2024
Published online: 14.03.2024

How to cite this paper: Gouiaa, R., & Huang, R. (2024). How do corporate governance, artificial intelligence, and innovation interact? Findings from different industries. Risk Governance and Control: Financial Markets & Institutions, 14(1), 35–52. https://doi.org/10.22495/rgcv14i1p3