Artificial Intelligence Adoption and Firm Financial Performance: Evidence from Publicly Listed Companies

Maryam Abdulridha Jwair Alrikabi; Jafar Haghighat

Authors

Maryam Abdulridha Jwair Alrikabi Master of Science in Economics, Islamic Financial Economics, Faculty of Economics and Management, University of Tabriz, Tabriz, Iran Author https://orcid.org/0009-0006-6232-3288
Jafar Haghighat Professor, Department of Economics, Faculty of Management and Accounting, University of Tabriz, Tabriz, Iran https://orcid.org/0000-0002-5470-5220

Keywords:

artificial intelligence adoption, financial performance, return on assets, return on equity, Tobin’s Q, panel data, Tehran Stock Exchange

Abstract

This study aimed to examine the relationship between artificial intelligence adoption and firm financial performance among companies listed on the Tehran Stock Exchange using accounting- and market-based performance indicators. This quantitative longitudinal study used balanced panel data from 146 nonfinancial companies listed on the Tehran Stock Exchange during 2018–2024, yielding 1,022 firm-year observations. Artificial intelligence adoption was measured using a disclosure-based Artificial Intelligence Adoption Index constructed from annual reports and official corporate disclosures. Firm financial performance was assessed using return on assets (ROA), return on equity (ROE), and Tobin’s Q. Firm size, financial leverage, firm age, sales growth, asset tangibility, and liquidity were included as control variables. Panel-data econometric analysis was conducted using random-effects generalized least squares models with firm-clustered robust standard errors, while year and industry effects were controlled. Artificial intelligence adoption was positively and significantly associated with ROA (β = 0.0067, SE = 0.0014, z = 4.79, p < 0.001), ROE (β = 0.0104, SE = 0.0026, z = 4.00, p < 0.001), and Tobin’s Q (β = 0.0710, SE = 0.0140, z = 5.07, p < 0.001). Financial leverage was negatively associated with all three performance measures, whereas sales growth and liquidity showed significant positive relationships with ROA, ROE, and Tobin’s Q. The overall models were statistically significant, explaining 34.7% of variation in ROA, 30.1% in ROE, and 39.2% in Tobin’s Q. Greater artificial intelligence adoption was associated with stronger accounting profitability and higher market valuation among publicly listed companies, suggesting that AI can function as a value-enhancing organizational capability when supported by appropriate financial, technological, and managerial resources.

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