Policy Coordination, Generative Artificial Intelligence, And Overseas Investment Efficiency: An Integrated Framework from The Perspective of Chinese Cities

Abstract

Against the backdrop of research on how coordinated urban governance influences firms’ overseas investment efficiency, this study incorporates the technological perspective of generative artificial intelligence and develops an integrated analytical framework at the Chinese city level. Using a bidirectional fixed effects model and instrumental variable approaches, the paper systematically examines the internal relationships among policy coordination, generative artificial intelligence, and firms’ overseas investment efficiency. The results show that urban policy coordination significantly enhances firms’ overseas investment efficiency. However, generative artificial intelligence exhibits a pronounced substitution effect rather than a simple reinforcing role. Specifically, a high level of artificial intelligence application weakens the marginal effectiveness of policy coordination. Mechanism analysis indicates that policy coordination improves investment efficiency through multiple channels, including reducing capital costs, compressing risk premia, and curbing agency costs. Further heterogeneity analyses and robustness checks confirm the reliability of the core findings. This study not only enriches theoretical discussions at the intersection of government governance and corporate internationalization in the digital era, but also provides important insights for local governments seeking to optimize coordinated governance and for firms aiming to leverage artificial intelligence technologies to enhance overseas investment performance.