Artificial Intelligence and Firms’ Outward Foreign Direct Investment: Evidence from Chinese Listed Companies

This study investigates the impact of artificial intelligence (AI) application on the outward foreign direct investment (OFDI) of Chinese A-share listed firms from 2009 to 2023.Using a large panel dataset and a two-way fixed effects model, the empirical results demonstrate that AI application significantly reduces firms' likelihood of undertaking OFDI.This negative effect remains highly robust after excluding major event years, removing municipality samples, constructing a balanced panel, and replacing the dependent variable with the scale of outward investment.Further heterogeneity analysis reveals that the suppressing effect of AI is more pronounced in non-state-owned enterprises, firms with high financing constraints, large firms, and those in technology-intensive industries.These findings suggest that AI strengthens firms' domestic operational efficiency, thereby weakening the incentives for overseas expansion and reshaping internationalization strategies under digital transformation.The study provides micro-level evidence on the interaction between intelligent technologies and global expansion decisions and offers policy insights for balancing AI-driven efficiency gains with long-term internationalization goals.