Artificial Intelligence and exporting performance:Firm-level evidence from Portugal

The adoption of new digital technologies offers new opportunities and has the scope to engender positive effects on firms’ expansion and success in international markets. This paper examines the main factors driving the adoption of Artificial Intelligence (AI) and AI-related digital technologies that enable the Industry 4.0 transformation and whether these new generation of digital technologies affect exporting performance at firm level. Using a rich and representative sample of Portuguese firms over the period 2014-2020, the estimated results suggest that firm’s ex-ante performance, digital infrastructures and in-house ICT skills are the main drivers of digitalisation. However, conditional to ex-ante firm’s performance, there are heterogenous effects on exporting performance across digital technologies and across industries. Moreover, there is evidence of positive selection towards large firms, casting doubts on the inclusiveness of the adoption process and the performance effects of AI and AI-related technologies.