How does language diversity influence AI development? Evidence from China

This study examines the impact of language diversity on regional AI development using panel data from 234 prefecture-level and above cities in China from 2008 to 2022. We find that language diversity has a significant positive effect on AI development—regions with greater language diversity tend to experience stronger growth in their AI industries. Mechanism analysis reveals that language diversity promotes AI development primarily by shaping regional cultural characteristics, as captured by Hofstede's cultural dimensions. Specifically, it reduces uncertainty avoidance, enhances long-term orientation, and increases tolerance for individual differences, thereby fostering a sociocultural environment conducive to AI development. Heterogeneity analysis shows that the positive effect of language diversity is more pronounced in regions with weaker formal institutional development or stronger Confucian cultural traditions, highlighting the interactive role of culture and institutions in technological evolution.