Is It Worth the Hype? Influence of Artificial Intelligence Efforts on Key Financial Company Metrics

Abstract

Artificial Intelligence poses a consortium of multiple digital technologies able to perform tasks which were thought about that they can only be done by humans. To do so, it applies complex learning and decision-making processes based on analysis of structured and unstructured data. Currently, AI is assumed to have massive benefits in the areas of efficiency and performance of companies, although the impact on financial key performance indicators (KPI) is still unexplored. The underlying thesis of this research is that the financial impact of AI can already be seen in practice. The research question is whether there is an impact of company-driven AI efforts on financial KPI, like the return on assets (ROA) and the market capitalization.

To obtain the intended results, a theoretical and empirical analysis was chosen as particular approach. Firstly, the existing scientific research is examined regarding already measurable financial impacts of digital technologies. In a second step, a regression model for panel data will be applied on a dataset containing financial data of the forty biggest German companies and their respective AI effort per year as a binary variable over a time period of seven years.

As a result, a financial influence of AI cannot be verified yet on a statistically significant level. Despite of this, an increasing number of AI efforts over the last years can be confirmed.