Robots and Firms

Abstract

We study the microeconomic implications of robot adoption using a rich panel data-set of Spanish manufacturing firms over a 27-year period (1990-2016). We provide causal evidence on two central questions: (1) Which firm characteristics prompt firms to adopt robots? (2) What is the impact of robots on adopting firms relative to non-adopting firms? To address these questions, we look at our data through the lens of recent attempts in the literature to formalize the implications of robot technology. As for the first question, we establish robust evidence for positive selection, i.e., ex-ante better performing firms (measured through output and labour productivity) are more likely to adopt robots. On the other hand, conditional on size, ex-ante more skill-intensive firms are less likely to do so. As for the second question, we find that robot adoption generates substantial output gains in the vicinity of 20-25% within four years, reduces the labour cost share by 5-7%-points, and leads to net job creation at a rate of 10%. These results are robust to controlling for non-random selection into robot adoption through a difference-in-differences approach combined with a propensity score reweighting estimator. To further validate these results, we also offer structural estimates of total factor productivity (TFP) where robot technology enters the (endogenous) productivity process of firms. The results demonstrate a positive causal effect of robots on productivity, as well as a complementarity between robots and exporting in boosting productivity.

Automation and Manufacturing Performance in a Developing Country

“…The negative plant level impact of robots on employment contrasts with the results of other studies in high-income countries, which find a positive employment impact at the firm-level (Acemoglu et al (2020); Koch et al (2019)). Our result could be reconciled with a positive employment effect if non adopting plants benefited from significant positive spillover from adopting plants.…”

“…Consistently with the predictions of a task-based model (Acemoglu and Restrepo, 2018b), the plant level results suggest that the positive impact on employment is driven by the productivity gains of automating plants. Our result differs from the existing literature based on advanced (Graetz and Michaels (2018); Acemoglu et al (2020); Acemoglu and Restrepo (2019); Koch et al (2019); Dauth et al (2017)) and emerging economies (Giuntella and Wang (2019); Artuc et al (2019)), which document a negative impact of robots on employment. Unlike this literature, our results suggest that for labor the productivity-enhancing effect of robot adoption prevails over the replacement effect.…”

“…Our paper is related to the growing literature on the impact of industrial automation on advanced economies at the industry and local labor market-level (Graetz and Michaels (2018); Acemoglu and Restrepo (2017); Dauth et al (2017); Giuntella and Wang (2019); Artuc et al (2019); Kugler et al (2020)), and at the firm-level (Acemoglu et al (2020); Koch et al (2019); Stapleton and Webb (2020)). These contributions suggest that differently to Indonesia, robots have an overall negative impact on labor demand in high-income et al (2017), among others.…”

“…While using workers' education to identify exposure to automation is consistent with the consensus in the literature, there are also other potential ways to define plant level exposure. For instance, Acemoglu et al (2020) and Koch et al (2019) provide evidence from advanced economies that firms that are large, have foreign capital, and export and import are more likely to adopt robots. We use this evidence to construct an alternative measure of exposure to robots.…”

COVID‐19 and food processing in Canada

“…Automation may have the added benefit of creating higher‐paying quality jobs. Koch et al (2019, p. 1) find that “ … robot adoption generates substantial output gains in the vicinity of 20%–25% within 4 years, reduces the labor cost share by 5%–7%‐points, and leads to net job creation at a rate of 10%.” Acemoglu and Restrepo (2020), on the other hand, find negative effects of industrial robots on employment and wages across U.S. commuting zones.…”