AI & Human Capital: Impact on Firm Efficiency & Growth

Both AI and human capital (HIC) have a more positive impact on non-state-owned firms and growing firms, with the latter experiencing a stronger improvement in efficiency. In contrast, human capital is more effective in enhancing the input-output efficiency of state-owned firms. This may be because non-state-owned firms have stronger incentives to reduce costs and increase efficiency through human-AI cooperation. Growing firms, as predicted by the firm's dynamic life cycle theory, tend to increase productivity faster than older firms by quickly learning and mastering advanced technology upon entering the market.