Federico Platania;Celina Toscano Hernandez;Imane El Ouadghiri;Jonathan Peillex
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Harnessing the Power of AI in RD&E Management: The Innovation Index
This article investigates the complex relationship between artificial intelligence (AI)-related technological innovation and its impact on the market returns of leading technology companies. We introduce the “Innovation Index,” a latent variable based on the number of AI-related patents, and incorporate it into the traditional Fama–French model to better capture the influence of AI advancements on financial performance. Using a state-space representation, our empirical analysis suggests that AI-related innovation significantly contributes to the market returns of prominent and leading technology firms. The findings highlight the strategic importance of AI investments in sustaining long-term growth and competitiveness.
期刊介绍:
Management of technical functions such as research, development, and engineering in industry, government, university, and other settings. Emphasis is on studies carried on within an organization to help in decision making or policy formation for RD&E.