The impact of artificial intelligence adoption on Chinese manufacturing enterprises’ innovativeness: new insights from a labor structure perspective

Purpose This research aims to investigate the impact of artificial intelligence (AI) adoption on the innovation dynamics of Chinese manufacturing enterprises, with a specific focus on the intricate interplay with the labor structure. Design/methodology/approach Leveraging panel data of listed companies from 2010 to 2022, this study employs the two-way fixed effects (TWFE) model to examine the influence of AI adoption on Chinese manufacturing companies' innovativeness. Firm-level AI adoption is measured by constructing a three-dimensional attention, application and absorption index. Findings The results indicate that (1) AI adoption has a positive impact on both internal innovation capability and external innovation interaction, (2) AI adoption has dual effects on the education and skill structure of labor in manufacturing enterprises and (3) enterprises with a highly educated and skilled workforce exhibit a stronger influence of AI adoption on innovativeness. Originality/value This research contributes to the academic and practical discourse by unveiling the underlying mechanisms of AI affecting innovation and introducing a new measurement of the AI adoption index. The findings emphasize the need for a highly educated and skilled workforce to navigate the complexities of AI-driven innovation, offering valuable theoretical and practical implications for policymakers and enterprises.