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Automation, global value chains and functional specialization

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  • Lionel Fontagné
  • Ariell Reshef
  • Gianluca Santoni
  • Giulio Vannelli

Abstract

We study how technology adoption and changes in global value chain (GVC) integration jointly affect labor shares and business function specialization in a sample of 14 manufacturing industries in 14 European countries in 1999–2011. Increases in upstream, forward GVC integration directly reduce labor shares, mostly through reductions in fabrication, but also via other business functions. We do not find any direct effects of robot adoption; robotization affects labor only indirectly, by increasing upstream, forward GVC integration. In this sense robotization is “upstream‐biased”. Rapid robotization in China shaped robotization in Europe and, therefore, relative demand for labor there.

Suggested Citation

  • Lionel Fontagné & Ariell Reshef & Gianluca Santoni & Giulio Vannelli, 2024. "Automation, global value chains and functional specialization," Review of International Economics, Wiley Blackwell, vol. 32(2), pages 662-691, May.
    • Handle: RePEc:bla:reviec:v:32:y:2024:i:2:p:662-691
    DOI: 10.1111/roie.12711
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