Does AI application make enterprises productivity higher? From the perspective of employee human capital upgrading
Does AI application make enterprises productivity higher? From the perspective of employee human capital upgrading

Summary/Abstract: Research background: With the rapid development of new-generation digital technologies, including big data, blockchain, and artificial intelligence (AI), the deep integration of AI into traditional industries has induced unprecedented economic changes. The development of AI technologies requires complementarity between capital and highly skilled employees, and the optimization of enterprise human capital structures warrants investigation; therefore, AI has significant potential to improve employees' human capital and enhance enterprise productivity. This study reveals the economic consequences of AI, examines the internal logic of optimizing enterprises' labour structures amid AI's rise, and explores how the application of AI affects enterprise productivity at the enterprise level, as well as the role of upgrading human capital in this process. Purpose of the article: This study aims to explore how AI application impacts enterprise productivity, as well as the mechanism by which such an impact is achieved through the enhancement of human capital. To begin with, we integrate advanced academic research to explore the theoretical relationships among AI applications, human capital upgrading, and enterprise productivity, thereby clarifying the inherent drivers and practical methods for boosting enterprise productivity. Subsequently, the study employs a dataset of 5,167 listed companies from the Shanghai and Shenzhen A-share markets to investigate how the adoption of AI affects corporate productivity through the lens of human capital enhancement. Furthermore, we offer strategic recommendations to adjust the workforce configuration and boost corporate efficiency by improving human capital quality and promoting AI applications. Methods: Using panel data from 3,646 Chinese A-share listed companies for the period 2011-2024, the study applies machine learning methods to generate an AI dictionary and investigates the relationships among enterprise AI application, human capital upgrading, and productivity. Findings & value added: Theoretical exploration indicates that AI applications will increase demand for high-skilled labour and crowd out some low-skilled labour to optimize the human capital structure, thereby improving enterprise productivity. A mechanism test reveals that AI applications enhance enterprise productivity by upgrading human capital. Heterogeneity analysis suggests that the impact of AI application on productivity is more significant for non-state-owned, small- and medium-sized, and non-technology-intensive enterprises. This research applies machine learning methods to generate an AI dictionary from a text-analysis perspective and constructs AI application indicators at the micro-enterprise level. At the same time, from the perspective of human capital upgrading, the study analyzes the impact of AI applications on enterprise productivity and provides a more reasonable explanation for the improvement of enterprise production efficiency in the AI era.

• Details
• Contents