AI Innovation and Economics Growth: A Global Evidence

Huy Tam Phan, Hong Tuyet Pham, Thanh Cuong Nguyen and Tran Phuoc
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Huy Tam Phan: University of Economics and Law, Ho Chi Minh City, Vietnam and Vietnam National University, Ho Chi Minh City, Vietnam.
Hong Tuyet Pham: University of Economics and Law, Ho Chi Minh City, Vietnam and Vietnam National University, Ho Chi Minh City, Vietnam.
Thanh Cuong Nguyen: Nha Trang University, Nha Trang, Khanh Hoa, Vietnam.
Tran Phuoc: Ho Chi Minh City University of Industry and Trade, Ho Chi Minh City, Vietnam.

WSB Journal of Business and Finance, 2024, vol. 58, issue 1, 198-216

Abstract: This research investigates the impact of artificial intelligence on economic growth, focusing on how AI-related activities such as scholarly publications, patent filings, and national AI strategies influence GDP across different national contexts. The study utilizes a comprehensive dataset from 2010 to 2023, covering 141 countries, and employs the SGMM to analyze the economic impacts of AI. Additionally, the study incorporates a Random Forest algorithm to assess the importance of various AI-related features, providing a nuanced understanding of which aspects of AI are most predictive of economic outcomes. This dual-methodology approach allows for robust analysis by addressing potential endogeneities with SGMM and validating feature significance with Random Forest. This ensures a thorough examination of AI’s contributions to economic growth. The SGMM analysis confirms that AI innovations significantly boost economic output, particularly in countries with robust AI strategies and advanced infrastructure. Complementing this, Random Forest analysis highlights that patents per million and comprehensive national AI strategies are crucial in predicting economic growth. These features are key drivers, indicating that dense innovation environments and strategic planning are essential for maximizing AI’s economic benefits. The study suggests that to leverage AI’s full economic potential, policymakers and business leaders should develop comprehensive AI strategies and foster environments conducive to AI integration. This research contributes unique insights into the quantitative effects of AI on economic growth, highlighting the role of national policies and infrastructure in enhancing AI’s economic impact. It offers a nuanced understanding of AI’s potential as a driver of sustainable economic development.

Keywords: Artificial Intelligence; Economic Growth; SGMM; Random Forest (search for similar items in EconPapers)
Date: 2024
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Persistent link: https://EconPapers.repec.org/RePEc:vrs:wsbjbf:v:58:y:2024:i:1:p:198-216:n:1017

DOI: 10.2478/wsbjbf-2024-0017

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