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AI-Adoption, Globalization, and Firms' Labor Investment Efficiency

Year: 2025

Type: article

Abstract: This paper examines how AI adoption affects firms' labor investment efficiency, focusing on moderating the impact of globalization in GCC nations. Using firm-level panel data from 2015 to 2024, it applies a System Generalized Method of Moments (GMM) to account for endogeneity and dynamic adjustments. Dynamic Capabilities Theory (DCT) suggests that AI adoption is a strategic resource for a firm to improve efficiency. Using four country-level globalization proxies: the Globalization Index (KOF), the Digital Adoption Index (DAI), the Global Competitiveness Index (GDI), and Total Factor Productivity (TFP), it found that globalization moderates AI adoption's impact on labor investment efficiency, supporting Globalization and Labor Market Theory, which states that globalization affects enterprises' resource optimization through global markets and technologies. It also shows that AI adoption improves labor investment efficiency significantly, and globalization's moderating effect strengthens this relationship, especially in more globally integrated countries.

Source: Journal of Organizational and End User Computing

DOI: 10.4018/joeuc.389154

Authors: ShiYong Zheng, Lei Tong, Talles Vianna Brugni, Abad Alzuman, Ubaldo Comite, Amal S. Alfawzan

Institutions: Nanning University, Guilin University of Electronic Technology, Wuhan Business University, Fucape Business School, Princess Nourah bint Abdulrahman University, Giustino Fortunato University, Qassim University

Language: English

Topic: Impact of AI and Big Data on Business and Society

Subfield: Management Science and Operations Research

Field: Decision Sciences

Domain: Social Sciences

SDGs: Decent work and economic growth, Industry, innovation and infrastructure

Open Access status: diamond

OpenAlex ID: W4414535194

FWCI: 0.819

Cites: 66

Cited by: 1

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