AI governance, as a concept, remains strikingly elusive — like trying to nail fog to a wall. Everyone in policy circles talks about it; few have seen a truly functional model in the wild. This paper interrogates how outward foreign direct investment (OFDI), digital governance frameworks, and AI adoption combine — or fail to combine — to shape innovation performance across Indian regions. The present study demonstrates OFDI helps innovation, but whether that relationship is stronger in places where digital infrastructure is robust and AI is genuinely in use. The panel data from 2015 to 2022 and combine econometric modelling with case-based fieldwork, both digital governance quality and AI adoption appear to amplify what OFDI does for regional innovation.
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