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Automation from fires: Evidence from China

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  • Li, Weibing
  • Li, Mingyang

Abstract

We demonstrate that wildfires significantly drive automation among China's manufacturing enterprises. Utilizing a two-stage least squares regression approach, our core finding reveals that both greater wildfire frequency and larger burned areas lead to a significant increase in the adoption of industrial robots by enterprises. The mechanism analyses indicate that wildfires accelerate this automation trend primarily by reducing labor employment, undermining production efficiency, and intensifying government focus on emergency management. Furthermore, our heterogeneity analyses further show that the positive impact is stronger in regions with high population mobility, among enterprises facing lower financing constraints, and within labor-intensive industries. Finally, by using geographic distance to exclude direct damage, we establish that the indirect effects, particularly those stemming from wildfire smoke, still exert a significant positive influence on the adoption of industrial robots.

Suggested Citation

  • Li, Weibing & Li, Mingyang, 2026. "Automation from fires: Evidence from China," Energy Economics, Elsevier, vol. 153(C).
    • Handle: RePEc:eee:eneeco:v:153:y:2026:i:c:s0140988325008850
    DOI: 10.1016/j.eneco.2025.109055
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    JEL classification:

    • L2 - Industrial Organization - - Firm Objectives, Organization, and Behavior
    • J2 - Labor and Demographic Economics - - Demand and Supply of Labor
    • Q5 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics

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