University Research

Internal business process governance and external regulation: How does AI technology empower financial performance?

Author 1 OrcID

https://orcid.org/0000-0003-4126-9244

Academic department

Department of Finance

Description

We examine the impact of artificial intelligence (AI) technology on the financial performance of financial firms, focusing on the transmission role of business process governance from the perspective of corporate governance. We examine whether there is heterogeneity in the effects of different institutional environments, conducting an empirical analysis of the sample data of 152 Chinese financial firms from 2011 to 2022. AI technology improves financial enterprises' operational quality through risk management, internal governance, and internal control. Moreover, AI provides technical support to enhance service derivative capability by enhancing the number of businesses across cross-regional operations, resource competition, and customer excavation. We also identify that the enabling effect of digital technology on business process governance is affected by imitation pressure from peer firms. In contrast, the impact of government regulatory pressure is not significant.

Publisher name

Elsevier

Document Type

Article

Publication Date

1-13-2025

Publication Title

International Review of Financial Analysis

Volume

99

First Page

1

Last Page

11

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