Strategic Choices Amidst Financial Mismatch: How Does Corporate Digitalization Influence Resource Allocation?

It is on this dual background of financial mismatch and corporate sustainability that the present paper explores how the level of artificial intelligence (AI) development would influence the efficiency of corporate investment as well as its mechanism. Using panel data of Shanghai and Shenzhen listed companies of A-shares between 2010 and 2023 and applying the fixed-effects model with mediation and moderation analysis, it is suggested that the level of AI development significantly boosts the efficiency of corporate investments. This impact is mostly observed in improved number and quality of innovation, improved information disclosure, internal control and lower agency expenses. Additional discussion shows that financial incompatibility significantly undermines the beneficial effect of AI on efficiency of investment. Heterogeneity tests revealed that the positive effects of AI are more pronounced in non-state-owned enterprises, high-tech firms, and growth-stage companies, as well as in firms operating in environments with a high level of financial development and a low level of legal development. This study provides empirical evidence for the strategic application of AI in resource allocation. The research focuses on helping enterprises optimize investment decisions during their digital transformation while assisting governments in refining their fiscal resource allocation policies.