Artificial Intelligence Capability and Corporate Financial Resilience: The Mediating Role of Financial Decision Quality and the Moderating Role of Enterprise Risk Management: Evidence from Pakistan Stock Exchange Listed Firms

Abstract

Artificial Intelligence (AI) has become a pivotal asset that is revolutionizing corporate finance by elevating financial projection, investment appraisal, risk analysis, and tactical decision-making. Regardless of expanding corporate allocation to artificial intelligence technologies, finite experiential proof is present concerning how AI capabilities add to corporate financial resilience, specifically in developing economies such as Pakistan. Utilizing the Resource-Based View (RBV), Dynamic Capability Theory (DCT), and Organizational Information Processing Theory (OIPT), this study advances an orchestrated schema investigating the impact of AI potential on enterprise financial elasticity through the intervening mechanism of fiscal decision excellence and the conditioning function of Enterprise Risk Management (ERM). The study utilizes a measurable, observational investigation framework focusing on finance executives, chief financial officers, risk managers, finance directors, and senior financial analysts working in Pakistan Stock Exchange (PSX) listed firms. Data was examined using Partial Least Squares Structural Equation Modeling (PLS-SEM) through Smart PLS 4. The study was anticipated to show that artificial intelligence competencies substantially upgrade enterprise resilience by elevating the standard of tactical financial decision. Moreover, Business Risk Management is projected to reinforce this interconnection by offering an amalgamated governance structure for handling financial uncertainty and corporate risks. The study plays a part in the developing literature on AI-driven business finance by amalgamating technological competency, financial decision-making and risk management into an integrated experiential structure. The empirical estimations are anticipated to yield theoretical advancements to strategic management and corporate finance while furnishing practical takeaways for executives, regulators, and policymakers endeavoring to improve corporate resilience through smart systems.