Yongxiang Wang, Zhanhong Wu, Jun Lawrence Zhang
Generative artificial intelligence, as an emerging technology, is transforming corporate decision-making processes, particularly in investment decisions. While existing research highlights its potential to improve decision efficiency, its impact on corporate investment herd behavior remains underexplored. Using panel data from non-financial listed companies in China's A-share market from 2017 to 2024, this study examines how generative AI affects corporate investment herd behavior and its heterogeneity across industries and firm types. The results show that generative AI significantly reduces herd behavior in corporate investment decisions and enhances decision-making independence. Mechanism analysis indicates that this effect operates through improved investment decision quality, reduced agency costs, and enhanced interaction between firms and investors. Heterogeneity analysis further shows that the effect is stronger in non-state-owned enterprises and high-tech industries, while it is weaker in non-high-tech industries and state-owned enterprises. These findings provide firm-level evidence on the role of generative AI in shaping corporate investment behavior and mitigating investment herd effects.