The Impact of Artificial Intelligence Pilot Policies on Stock Price Volatility: Evidence from Chinese Listed Firms

Abstract

As financial systems increasingly support technological innovation, understanding how industrial policies affect capital market stability is crucial. Using a sample of Chinese A-share listed companies from 2014 to 2024, this study identifies AI-related firms through text analysis and constructs a difference-in-differences model to examine the impact of AI pilot policies on corporate stock price volatility. The research indicates that AI industrial policies significantly reduce stock price volatility among affected firms. Heterogeneity analysis reveals that the policy effect is more pronounced for firms located in eastern China and privately owned firms.