How does AI accelerate firm innovation? The mediating role of resource reconfiguration

Purpose Drawing upon the resource-based view and dynamic capabilities theory, this study aims to explore whether artificial intelligence (AI) accelerates firm innovation and, if so, how it accelerates innovation by reconfiguring resources across different stages of the innovation process. Design/methodology/approach This study combines textual analysis with AI-related assets to evaluate the AI variable, and measures firm innovation speed using the annual growth rate of patent applications. Furthermore, utilizing a sample of Chinese A-share listed firms from 2010 to 2023, this study performs empirical analysis through fixed effect models. Findings The results indicate that AI significantly accelerates firm innovation. Mechanism analysis reveals that AI accelerates firm innovation through promoting knowledge coupling (KC), optimizing the structure of human capital (HCS) and reducing asset specificity (AS). Heterogeneity analysis shows that the accelerating effect is stronger in firms operating in highly competitive markets, as well as in non-state-owned or technology-intensive firms. Originality/value The impact of AI on firm innovation speed has rarely been explored in the extant research. This study investigates whether and how AI accelerates firm innovation, thereby enriching the existing literature on AI’s impact on firm innovation. It also provides actionable insights for policymakers and managers seeking to expedite the innovation process.