The rapid advancements in artificial intelligence (AI) and its deployment by firms are important factors in attracting investors. By using the data of A-share Chinese listed firms from 2016 to 2022, this study attempts to estimate the possible linkage of AI adoption by firms in appealing the Foreign Institutional Investors (Foreign II's). The study findings indicate the following: (1) AI is positively linked to Foreign II's. (2) The heterogeneity analysis shows that this linkage is stronger in new firms. (3) Firm performance significantly improves the relationship between AI and Foreign II’s. (4) In contrast, firm age negatively influences this relationship. After employing several robustness tests, the study findings remain validated. Overall, we provide important insights and actionable references to support the strategic incorporation of AI into organizational operations, aiming to attract foreign investments. • Firms that leverage Artificial Intelligence to drive their business operations tend to attract a higher level of interest and investment from foreign institutional investors. • Firm performance is a key determinant of Artificial Intelligence supported firms to enhance foreign institutional investments. • Foreign institutional investors are more interested to invest in new firms than old firms. • New firms adopt more Artificial Intelligence in their business operations than old firms.
Khan et al. (Sun,) studied this question.