This study examines how artificial intelligence (AI) orientation influences the internationalization of emerging market manufacturing firms. It specifically investigates the mediating roles of product innovation and marketing capabilities as firm-specific advantages (FSAs), as well as the moderating role of industry competition, a key contextual contingency, in the relationship between AI orientation and the depth and breadth of internationalization.
Drawing on panel data from 2,322 Chinese manufacturing firms, the study employs fixed-effects regression models, along with mediation and moderation analyses, to test the hypothesized relationships. A comprehensive series of analyses, including seemingly unrelated regression, Poisson regression, instrumental variable tests, the PROCESS macro, partial least squares structural equation modelling, and a set of heterogeneity analyses, is conducted to ensure the validity of the findings.
Our findings show that: (1) AI orientation has a positive impact on the depth and breadth of internationalization, with a comparatively greater influence on internationalization depth. (2) Product innovation and marketing capabilities play a positive mediating role between the two. (3) Industry competition negatively moderates the positive relationship between AI orientation and the depth and breadth of internationalization. Furthermore, the positive and significant effect of AI orientation is evident among profitable firms in non-coastal areas of China and in the high-tech sector, but becomes negligible or even negative among non-high-tech firms.
This study conceptualizes AI orientation as a strategic posture that integrates digital transformation and FSAs, reflecting a firm's proactive commitment to using AI to improve decision-making, innovation, and market engagement. It also offers practical insights for managers and policymakers on leveraging AI to support international growth.
