AI Integration and Financial Performance among Women-Led SME Ventures in Emerging Markets: Evidence from the Manufacturing Sector of Pakistan and the Mediating Role of Women Leadership

Abstract

This research study investigates whether women's leadership mediates the relationship between AI integration and financial performance among women-led SME enterprises operating in an emerging market. Questionnaires were distributed amongst 250 respondents, including managers, and employees of SMEs in Pakistan. 204 responses were received. Hayes' (2022) PROCESS macro (Model 4) was used to analyze data from 204 responses from SMEs. The findings indicate a strong, statistically significant direct impact of AI integration on financial performance (b =.846, p <.001; r =.815, p <.001). But once AI integration was considered, there was no significant correlation between women's leadership and financial performance (b = -.004, p =.951) or between women's leadership and AI integration (b =.073, p =.154). There was no statistical support for mediation because the bootstrapped indirect impact was small and its confidence interval covered zero (effect = -.0003, 95% CI [-.0096,.0085]). According to the resource-based view, dynamic capabilities theory, and upper echelons theory, these results imply that AI's contribution to financial performance within this sample of Pakistani manufacturing SMEs operates through a direct pathway rather than through a women-leadership mechanism. Future research directions, constraints, and theoretical and managerial implications are examined.