Strategic Adoption of Artificial Intelligence and Firm Performance: The Mediating Role of Strategic Agility in Emerging Economies
Purpose: This study examines the relationship between the strategic adoption of artificial intelligence (AI) and firm performance, with strategic agility serving as a mediating mechanism, in the context of emerging economies. Design/Methodology/Approach: Drawing on data collected from 220 firms operating across multiple sectors, the study employs a quantitative research design and analyzes the proposed model using partial least squares structural equation modeling (PLS-SEM). Findings: The results reveal that strategic AI adoption has a significant positive effect on firm performance and strategic agility. Furthermore, strategic agility is found to positively influence firm performance and partially mediate the relationship between strategic AI adoption and firm performance. These findings suggest that AI creates value not only through direct performance improvements but also by enhancing firms’ strategic responsiveness and adaptability. Practical Implications: The study contributes to strategic management and digital transformation literature by clarifying the mechanism through which AI-driven strategies influence performance, particularly in emerging economies. Originality/Value: The findings also provide practical insights for managers seeking to leverage AI strategically to achieve sustainable competitive advantage in dynamic and uncertain environments.