WHY DO ENTERPRISES ADOPT AI? GOVERNMENT AI READINESS AND CULTURAL LEADERSHIP CONTEXTS IN EUROPE

This study examines the extent to which the adoption of artificial intelligence (AI) at the enterprise level in Europe is shaped by government institutional readiness and national cultural dimensions. Integrating institutional theory with Hofstede's cultural dimensions model, the research analyzes how the Government AI Readiness Index, Uncertainty Avoidance (UAI), and Long-Term Orientation (LTO) influence AI adoption in 31 European countries in 2025. Using a multiple linear regression model with interaction terms, the study tests the direct and moderating effects of these factors on the proportion of businesses using AI technologies. The results confirm that government institutional readiness exerts a significant positive effect on AI adoption (β = .450, p = .006), explaining 52.4% of the variation in adoption (R² = .524, F = 7.147, p < .001). Uncertainty avoidance moderates this relationship (β = -.290, p = .055), diminishing the positive effect of institutional readiness in societies with high UAI. The direct effects of UAI and LTO are not significant in the full model, suggesting that the influence of culture is predominantly conditional. The study demonstrates that the success of public policies promoting AI depends on the alignment between institutional capacity and the national cultural context. The practical implications highlight the need for culturally adapted national strategies, mechanisms to reduce perceived risk, and managerial practices that address the anxiety associated with technological change in contexts with high uncertainty avoidance.