The Impact of Artificial Intelligence Adoption on Corporate Default Risk: Empirical Evidence Based on Large Language Models
Against the backdrop of rapid advances in digital technologies and growing uncertainty in the business environment, artificial intelligence (AI) offers firms new opportunities to strengthen risk identification, improve managerial decision-making, and mitigate default risk. Using firm-level data from Chinese A-share listed companies over the period 2009–2024, this study empirically examines the relationship between AI adoption and corporate default risk. The results indicate that AI adoption is associated with a significant reduction in corporate default risk. This finding remains robust to alternative fixed-effects specifications, different levels of standard-error clustering, and the exclusion of observations from periods affected by major external shocks. Heterogeneity analyses further reveal that the negative association is particularly pronounced among firms in non-high-tech industries and those located in eastern and central China. By examining AI adoption from a corporate risk management perspective, this study extends the literature on the economic consequences of AI adoption and provides firm-level empirical evidence on the role of digital technologies in mitigating financial risk. The findings also offer policy implications for integrating AI into corporate management practices and strengthening firms’ risk governance capabilities.
Authors
- Xiangchun Liu (ORCID: https://orcid.org/0009-0005-1671-2445)
- Yuecong Xing
- Chuhan Su
Institutions
- Minzu University of China (CN)
- King's College London (GB)
Publication Details
- Journal
- Innovation in Science and Technology
- Published
- 2026-11-02
- DOI
- https://doi.org/10.63593/ist.2788-7030.2026.09.007
- Primary Topic
- Financial Distress and Bankruptcy Prediction
- Type
- article
- Field-Weighted Citation Impact
- 0.00