TITLE:
Research on the Impact of Organizational AI Capability on Innovation Performance
AUTHORS:
Sen Wang, Yingyuan Chu, Wanting Guo
KEYWORDS:
AI Capability, Innovation Performance, AI-Enhanced Knowledge Management
JOURNAL NAME:
Open Journal of Business and Management,
Vol.14 No.4,
July
21,
2026
ABSTRACT: Although artificial intelligence (AI) has become increasingly embedded in organizational innovation activities, firms still differ in their ability to convert AI investments into innovation outcomes; therefore, this study examines how AI capability influences firm innovation performance through AI-enhanced knowledge management and how information governance conditions this value creation process. Based on survey data from 416 firms that had adopted AI, this study uses SPSS to examine the effect between AI capability, knowledge acquisition, knowledge sharing, knowledge application, and the moderating role of information governance. The results show that AI capability significantly improves innovation performance and positively affects all three knowledge management processes; knowledge acquisition and knowledge sharing significantly mediate the relationship between AI capability and innovation performance, whereas the mediating effect of knowledge application is not significant, and information governance strengthens both the AI capability-innovation performance relationship and the effects of AI capability on AI-enhanced knowledge management. This study contributes to AI value creation research by shifting attention from AI adoption to AI capability building, opening the black box between AI capability and innovation performance through AI-enhanced knowledge management, and identifying information governance as an enabling condition for transforming AI capability into innovation value.