@TechReport{iza:izadps:dp18175, author={Díaz, Guillermo Arenas and Piva, Mariacristina and Vivarelli, Marco}, title={Artificial Intelligence as a Complement to Other Innovation Activities and as a Method of Invention}, year={2025}, month={Oct}, institution={Institute of Labor Economics (IZA)}, address={Bonn}, type={IZA Discussion Paper}, number={18175}, url={https://www.iza.org/index.php/publications/dp18175}, abstract={This study investigates the relationship between Artificial Intelligence (AI) and innovation inputs in Spanish manufacturing firms. While AI is increasingly recognized as a driver of productivity and economic growth, its role in shaping firms’ innovation strategies remains underexplored. Using firm-level data, our analysis focuses on whether AI complements innovation inputs - specifically R&D and Embodied Technological Change (ETC) - and whether AI can be considered as a Method of Invention, able to trigger subsequent innovation investments. Results show a positive association between AI adoption and both internal R&D and ETC, in a static and a dynamic framework. Furtheremore, empirical evidence also highlights heterogeneity, with important peculiarities affecting large vs small firms and high-tech vs low-tech companies. These findings suggest that AI may act as both a complement and a catalyst, depending on firm characteristics.}, keywords={Artificial Intelligence;method of invention;R&D;innovation inputs;innovative complementarities}, }