Building the efficiency bridge: Artificial intelligence innovation, high-growth firms and industry competition through governance

High-growth firms serve as vital drivers of economic vitality; however, sustaining their rapid growth remains a formidable challenge. Although researchers widely regard artificial intelligence (AI) innovation as a key competitive advantage, the specific mechanisms through which it fosters high-growth firms remain underexplored. We analyse 20,178 firm–year observations from China (2007–2022) using technology affordance actualisation theory to investigate this relationship. Results show that AI innovation drives high growth primarily by enhancing firm efficiency. Particularly, we identify a critical contingency: the intensity of industry competition negatively moderates the effect of AI innovation on firm efficiency. A novel finding reveals that board size conditions whether this moderating effect persists. Specifically, industry competition undermines efficiency gains only in firms with small boards, thereby hindering high growth. By contrast, large boards nullify this negative effect, enabling AI innovation to drive firms towards high-growth status even under competitive pressure. Our study theoretically advances the literature by elucidating the contingent role of industry competition and establishing board size as a crucial governance mechanism that determines the success of AI innovation in promoting high growth.