Abstract
ABSTRACT Using 6,566 observations of bond credit ratings in China from 2010 to 2022, this paper empirically finds that artificial intelligence (AI) adoption by firms improves bond credit ratings via improving productivity and information transparency. Such a positive relationship is more pronounced when the issuers are non-state-owned enterprises, labor-intensive enterprises, or engage heavily in earnings management. This study enriches the literature of the influencing factors of credit ratings and the economic consequences of AI adoption. Furthermore, this study offers insights for enterprises seeking to leverage AI for reduced financing costs, and sheds light on future digital policy design.
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