Can artificial intelligence assist banks in improving city entrepreneurship?

Daoping Wang, Yaxi Liang and Xinyan Shen

Finance Research Letters, 2025, vol. 83, issue C

Abstract: This study explores how bank-based artificial intelligence (AI) promotes city-level entrepreneurship through enhanced credit availability. Using AI-related keywords from bank annual reports and branch distribution data, we develop a city-level bank AI index. Empirical results indicate a positive association between bank AI adoption and entrepreneurship, especially in northern China, large cities, and cities characterized by strong human capital, advanced industrial structures, high gross domestic product per capita, and substantial government intervention. Robustness and endogeneity tests confirm this relationship. Mechanism analysis further reveals that AI-driven credit expansion by banks facilitates city entrepreneurial activity.

Keywords: Banking; Artificial intelligence; Entrepreneurship; Fintech; Credit availability (search for similar items in EconPapers)
Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:eee:finlet:v:83:y:2025:i:c:s1544612325009791

DOI: 10.1016/j.frl.2025.107721

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