Outward foreign direct investment in the artificial intelligence era: productivity enhancement versus asset-light expansion

This study utilizes data from Chinese A-share listed companies spanning 2011–2022 to investigate the impact of artificial intelligence (AI) on firm-level outward foreign direct investment (OFDI). The empirical results indicate that AI adoption significantly increases the number and geographic diversification of overseas subsidiaries through the labour-productivity-enhancing effect. However, this positive effect is not significant in the service sector overall, suggesting an asset-light expansion mechanism in the AI-OFDI nexus. Additional heterogeneity analyses within service industries reveal that the positive effect of AI on OFDI is more pronounced in non-ICT and large-scale service firms, further underscoring the productivity enhancement and asset-light expansion mechanisms. Our findings provide valuable insights for relevant departments to utilize AI to gain competitive advantages in global markets.