Abstract
This study investigates the impact of digitalization and AI adoption on the market share of banks operating in the Gulf Cooperation Council's (GCC) region, drawing upon the resource-based view (RBV) and dynamic capabilities theory (DCT). In the current context of digital transformation and AI-driven innovation reshaping the banking sector, it is crucial to understand the role of these technologies in driving competitive advantage. The study constructs novel composite indices for digitalization and AI adoption using secondary data from 400 bank-year observations across five GCC countries between 2015-2024. Employing a dynamic panel estimation technique, the analysis reveals that both digitalization and AI adoption significantly and positively influence bank market share, even after controlling for profitability, bank size, and macroeconomic conditions. These results hold strong across different models, supporting the idea that improving and adapting technological skills is key to enhancing the market share of banks. The study offers theoretical contributions by operationalizing digital and AI capabilities as strategic resources and practical implications for bank executives and policymakers aiming to strengthen digitalization in the financial sector. It also provides one of the first empirical validations of the digitalization–market share nexus in the GCC context, thereby filling an important gap in the literature on technology-enabled market performance.