Artificial Intelligence and Firm-Level Productivity: Early Evidence from a Small Open Economy

Artificial Intelligence (AI) is a modern general-purpose technology (GPT) with the potential to enhance the productivity of firms in every sector of the economy. Notwith standing the growing interest in AI as a new source of productivity growth, evidence on firm-level productivity gains from using AI is scarce. This paper contributes to filling this evidence gap using firm-level data from Ireland over 2013-2024. By leverag ing a Local Projection Difference -in-Differences framework and Propensity Score Matching, we find that, at this early stage, on average, the productivity gains from AI adoption are small, delayed, and short-lived in time. However, the heterogeneity analysis reveals more substantial, immediate, and persistent effects for firms that use AI for specific purposes, particularly in marketing, business administration, and ICT security as well as for those adopting technologies that automate workflows or assist in decision-making, such as robotic process automation (RPA) .