Driving Success: Examining the Influence of Innovation Culture on Artificial Intelligence Adoption and Firm Performance in Asian SMEs

The paper investigates the connection between artificial intelligence (AI) and firm performance in Small Medium-sized Enterprises (SMEs) context in Asia. It also explores the mediating role of innovation culture (IC) in this relationship. This paper adopts a quantitative approach and uses a survey method to collect data from 219 SMEs employees. Inferential and descriptive statistics are used to analyze the findings, incorporating Smart PLS version 4.3 and IBM’s Statistical Package for the Social Software (IBM-SPSS) versions 23. The findings show that AI has positive effect on firm performance (FP) and innovation culture partially mediates this effect. This paper contributes to body of knowledge on AI and innovation by highlighting the importance of fostering a culture that supports creativity, open dialogues, data literacy and stakeholder participation in SMEs that adopt AI technologies. This paper also provides practical implications for different stakeholders on how to leverage AI and IC to improve their competitiveness and growth.