The Differential Market Valuation of Software and Hardware AI Assets in Generative AI Adoption_Vol. 3 No. 2 (JMSD 2026)_Journal of Management and Social Development (ISSN: 3005-5741)

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The Differential Market Valuation of Software and Hardware AI Assets in Generative AI Adoption

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DOI: https://doi.org/10.62517/jmsd.202612218

Author(s)

Siwei Zhang*

Affiliation(s)

School of Economics and Management, Tongji University, Shanghai, China *Corresponding Author

Abstract

Generative AI (GenAI) can raise productivity, but adopting it imposes significant costs on firms. Prior research examines how capital markets react to AI adoption announcements, yet no study has investigated whether firms' existing software and hardware AI assets differentially shape those reactions. This gap is worth addressing because the two asset types follow diverging value logics under the emerging Model-as-a-Service paradigm. Using event study methodology and threshold regression on a hand-collected sample of 241 GenAI adoption announcements by Chinese A-share listed firms, we find that the market reacts positively overall (CAAR[0,1]= 1.07%, p < 0.01), but the effect is moderated by asset structure. Software assets exhibit a positive but diminishing marginal effect, becoming insignificant beyond 0.24% of total assets. Hardware assets exhibit a neutral marginal effect at low scale that turns significantly negative beyond 0.64% of total assets. These contrasting nonlinear patterns indicate that capital markets differentiate between software and hardware AI assets when pricing GenAI adoption.

Keywords

GenAI Adoption; Event Study; Threshold Regression; IT Asset Structure; Resource-Based View

References

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