AI-Driven Workforce Productivity in Developing Economies: Analyzing Employee Engagement and Organizational Agility

This study investigates the impact of Artificial Intelligence Implementation (AII) on Employee Engagement (EE) and Employee Performance (EP), examines the organizational Agility (OA)’s moderating role in China's manufacturing sector’s Information Technology integration. Data was collected from major manufacturing provinces: Zhejiang, Shandong, Jiangsu, Guangdong, and Henan (N = 899), covering biomedicines, renewable energy products, textiles, automobiles, and electronics. The structural equation modelling results reveal that AIA significantly enhances EP directly and indirectly through EE. OA positively moderates the relationship between AIA and EE, highlighting that greater agility organizations are more effective in turning AI-driven Information Technology initiatives into higher employee engagement. The moderation effect is evidenced by a steeper slope in the interaction plot under high OA conditions. This study enriches the AI and IT-driven transformation theory in human resource management practices and offers practical insights for manufacturing leaders.