Artificial Intelligence, CEO Turnover, and Directional Change in Firm Innovation

Presenter Information

Bowen Lou, University of ConnecticutFollow
Xinyu Ma, University of PennsylvaniaFollow
Lynn Wu, University of PennsylvaniaFollow

Paper Number

2460

Paper Type

Completed

Description

We examine the role of artificial intelligence (AI) in facilitating a change in innovation directions after a leadership change. Using patent data for firms that have gone through a CEO turnover, we find that firms with greater AI investment are more successful in changing their innovation directions. The effect of AI is driven principally by the continued development of innovation in areas that are modestly different from the past. Further analyses show that this effect is likely due to firms with AI investment that can enable strategic change in cultivating culture of exploring frontiers in innovation and managing R&D. A new CEO can direct more resources to the acquisition of employees with greater technological capabilities such as AI skills to facilitate the innovation change. Overall, our study sheds light on the value of AI in fostering the change in innovation directions during uncertain and turbulent times.

Comments

14-DigitalInnovation

Recommended Citation

Lou, Bowen; Ma, Xinyu; and Wu, Lynn, "Artificial Intelligence, CEO Turnover, and Directional Change in Firm Innovation" (2023). ICIS 2023 Proceedings. 1.
https://aisel.aisnet.org/icis2023/diginnoventren/diginnoventren/1