Impact of artificial intelligence (AI) on operational performance: The role of dynamic capabilities

This study examines the role of dynamic capabilities (DCs) in the adoption of artificial intelligence (AI) systems in China’s telecommunications industry and their impact on firms’ operational performance. Drawing on DCs theory and the technology–organization–environment (TOE) framework, this study investigates how TOE factors influence DCs for AI system adoption, which subsequently impacts operational performance. It also examines the mediating role of DCs in the relationship between TOE factors and operational performance. Despite numerous studies on AI system adoption, the underlying mechanism of DCs requires further investigation. Survey data were collected from 205 senior executives of telecommunications firms in China. Analysis of the data reveals that TOE factors positively influence DCs for AI system adoption, which in turn have a positive effect on operational performance. Additionally, competitive pressure positively moderates the relationship between technological factors (i.e., technology compatibility and expected benefits) and operational performance. These findings provide managerial and theoretical insights into AI system adoption.