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The impact of automation on firms' reporting quality

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  • Oesch, David
  • Walser, Tanja

Abstract

This paper investigates how advances in automation technologies affect firms' information environments. Using an instrumental variable research design that exploits exogenous variation in industrial robot adoption, we present robust evidence that an increase in exposure to robots causes firms to lower financial reporting quality. As automation technology adoption entails adoption costs, we find that the effect is attributable to management's strategic increase of financial reporting discretion. In light of the rapid rise of automation technologies our paper provides important insights how such technologies impact firms' reporting quality.

Suggested Citation

  • Oesch, David & Walser, Tanja, 2025. "The impact of automation on firms' reporting quality," Journal of Corporate Finance, Elsevier, vol. 92(C).
    • Handle: RePEc:eee:corfin:v:92:y:2025:i:c:s0929119924001457
    DOI: 10.1016/j.jcorpfin.2024.102683
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    JEL classification:

    • M41 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Accounting - - - Accounting
    • O31 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Innovation and Invention: Processes and Incentives
    • O33 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes

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