Artificial intelligence capability, CEO-TMT interface and corporate innovation failure

Artificial intelligence (AI) capability has demonstrated significant potential in driving knowledge recombination, fostering knowledge discovery and enhancing organisational innovation performance. However, the interplay between AI capability and corporate innovation failure remains underexplored. To address this research gap, this study investigated the impact of AI capability on corporate innovation failure while further examining the moderating role of top management team (TMT) digital knowledge and its variation under different levels of integrative leadership shown by chief executive officers (CEOs). Using panel data from 3,829 firm-year observations in China from 2017 to 2022, the empirical analysis reveals that AI capability significantly reduces the likelihood of corporate innovation failure. Moreover, TMT digital knowledge exerts a significant positive moderating effect on this relationship. Further analysis reveals that this positive moderating effect is more pronounced when the CEO exhibits a high level of integrative leadership.