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The rise of robots and the fall of cost stickiness: Evidence from Chinese manufacturers

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  • Wanjiao Jia
  • Ting Yang
  • Xin Zhang

Abstract

Industrial robots are increasingly used to perform tasks traditionally assigned to humans. Using a sample of Chinese manufacturers, we examine the impact of robot adoption on firm cost stickiness. We find that robot adoption is associated with less sticky costs. The negative impact of robot adoption on cost stickiness is particularly meaningful for state‐owned enterprises and firms with higher labour costs, and becomes significantly stronger after the enactment of China's Labour Contract Law, which significantly increases labour adjustment costs. These findings are consistent with the conjecture that the adoption of robots allows firms to reduce their overall labour adjustment costs.

Suggested Citation

  • Wanjiao Jia & Ting Yang & Xin Zhang, 2023. "The rise of robots and the fall of cost stickiness: Evidence from Chinese manufacturers," Accounting and Finance, Accounting and Finance Association of Australia and New Zealand, vol. 63(3), pages 3147-3171, September.
    • Handle: RePEc:bla:acctfi:v:63:y:2023:i:3:p:3147-3171
    DOI: 10.1111/acfi.13022
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    References listed on IDEAS

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