“First-mover” or “Fast-follower”? The Pace of AI Adoption by Firms and Competitive Advantages

He Xiaogang, Li Ningbo

Foreign Economics & Management Vol. 48, Issue 01, pp. 115 - 131 (2026)  DOI:10.16538/j.cnki.fem.20251209.104

Summary

Existing studies primarily focus on the impact of AI adoption intensity on corporate performance, while neglecting the competitive advantages that the pace of AI adoption may bring. For the new technology of AI, should firms in the same industry act as a “first-mover” or a “fast-follower”? This paper uses data from Chinese listed firms from 2000 to 2023 to construct an indicator of AI adoption pace, and conducts regression analysis on industry-adjusted Lerner Index and ROI through a fixed effects model. The results show an inverted U-shaped relationship between the pace of AI adoption and competitive advantages, driven by the dual forces of first-mover advantages and disadvantages. Based on the resource-based theory, this relationship is moderated by firm resources: A higher share of top executives with IT expertise and greater digital complementary assets both flatten the curve and shift the inflection point. Further heterogeneity analysis finds that the inflection point occurs earlier with greater AI adoption intensity, and the inverted U-shape is more pronounced in manufacturing firms and specialized and innovative firms. By addressing the overlooked dimension of AI adoption pace, this paper enriches the research in the field of AI strategy, and provides both theoretical contributions and practical guidance for firms on the timing of AI adoption.

Keywords

AI; pace of AI adoption; competitive advantages; first-mover advantages; resource-based theory