Retail investor AI attention and firm AI innovation

This paper examines the effect of retail investor AI attention on corporate artificial intelligence (AI) innovation in emerging capital markets. Using a comprehensive dataset of firm-investor interactions from China’s official Investor Interactive Platforms (IIPs) between 2010 and 2023, we investigate whether AI-related inquiries from retail investors influence firms’ technological strategies. The results show that intensified retail investor AI attention is associated with significant increases in both the quantity of AI patent applications and the likelihood of AI patent grants. Mechanism analyses indicate that these effects operate through reduced managerial myopia, increased AI talent recruitment, and enhanced absorption of external knowledge. Further analyses reveal that the effects are stronger in more competitive industries and in firms led by executives with prior R&D experience. Overall, the findings underscore the role of digitally mediated investor attention and public disclosure mechanisms in shaping firms’ long-term AI innovation decisions in emerging markets.