Financial risk and technology shifting: Firm-level evidence from the rise of AI

Andrea Bacchiocchi (), Germana Giombini, Ludovica Segneri and Francesco Venturini
Additional contact information
Ludovica Segneri: Department of Economics, Society and Politics, University of Urbino Carlo Bo

No 199, Mo.Fi.R. Working Papers from Money and Finance Research group (Mo.Fi.R.) - Univ. Politecnica Marche - Dept. Economic and Social Sciences

Abstract: Does financial risk affect the firm decision to develop a new technology? We study this issue in the context of the take-off of Artificial Intelligence (AI). Using data on 28,000 Italian firms (2012–2019) matched with patent records, we find that companies handling higher cash-flow volatility are significantly more likely to innovate in AI. The role of financial risk is weaker for relatively more mature technologies, suggesting that firms more subject to financial uncertainty are more willing to undertake innovation in high-uncertainty, high-reward domains and drive frontier technological change.

Keywords: Artificial Intelligence; Financial risk; Cash-flow volatility; Technological uncertainty. (search for similar items in EconPapers)
JEL-codes: C23 G32 L25 O31 (search for similar items in EconPapers)
Pages: 22
Date: 2026-05
References: Add references at CitEc
Citations:

Downloads: (external link)
http://docs.dises.univpm.it/web/quaderni/pdfmofir/Mofir199.pdf First version, 2026 (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:anc:wmofir:199

Access Statistics for this paper

More papers in Mo.Fi.R. Working Papers from Money and Finance Research group (Mo.Fi.R.) - Univ. Politecnica Marche - Dept. Economic and Social Sciences Contact information at EDIRC.
Bibliographic data for series maintained by Maurizio Mariotti ().