IDEAS home Printed from https://ideas.repec.org/a/eee/finlet/v65y2024ics1544612324005312.html

Automation exposure and operating performance

Author

Listed:
  • Liu, Lei
  • Li, Tianze
  • Phan, Quoc
  • Wu, Zhenyu
  • Zheng, Steven Xiaofan

Abstract

We find that firms experiencing increases in exposure to new automation technology see deteriorating operating performance in subsequent years. This pattern is driven by financially constrained firms. For firms without financial constraints, increases in automation exposure are associated with increases in profits, increases in fixed assets and employees, decreases in selling, general, and administrative expenses, and increases in profit margin. For firms with financial constraints, increases in automation exposure are positively related to changes in expenses and negatively related to profit margin. It seems firms without financial constraints are in better positions to take advantage of innovations in automation technology.

Suggested Citation

  • Liu, Lei & Li, Tianze & Phan, Quoc & Wu, Zhenyu & Zheng, Steven Xiaofan, 2024. "Automation exposure and operating performance," Finance Research Letters, Elsevier, vol. 65(C).
    • Handle: RePEc:eee:finlet:v:65:y:2024:i:c:s1544612324005312
    DOI: 10.1016/j.frl.2024.105501
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S1544612324005312
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.frl.2024.105501?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to

    for a different version of it.

    References listed on IDEAS

    as
    1. Katja Mann & Lukas Püttmann, 2023. "Benign Effects of Automation: New Evidence from Patent Texts," The Review of Economics and Statistics, MIT Press, vol. 105(3), pages 562-579, May.
    2. repec:bla:jfinan:v:59:y:2004:i:4:p:1777-1804 is not listed on IDEAS
    3. Knesl, Jiří, 2023. "Automation and the displacement of labor by capital: Asset pricing theory and empirical evidence," Journal of Financial Economics, Elsevier, vol. 147(2), pages 271-296.
    4. Antony, Jürgen & Klarl, Torben, 2020. "The implications of automation for economic growth when investment decisions are irreversible," Economics Letters, Elsevier, vol. 186(C).
    5. Benmelech, Efraim & Zator, Michał, 2025. "Robots and firm investment," Journal of Financial Economics, Elsevier, vol. 174(C).
    6. Daron Acemoglu & Pascual Restrepo, 2020. "Robots and Jobs: Evidence from US Labor Markets," Journal of Political Economy, University of Chicago Press, vol. 128(6), pages 2188-2244.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Caselli, Mauro & Fracasso, Andrea & Scicchitano, Sergio & Traverso, Silvio & Tundis, Enrico, 2025. "What workers and robots do: An activity-based analysis of the impact of robotization on changes in local employment," Research Policy, Elsevier, vol. 54(1).
    2. Qiu, Jiaping & Wan, Chi & Wang, Yan, 2024. "Labor-saving innovations and capital structure," Journal of Corporate Finance, Elsevier, vol. 84(C).
    3. Ince, Barıs & Iskenderoglu, Cansu, 2025. "Automation cost flexibility and firm value," Journal of Corporate Finance, Elsevier, vol. 94(C).
    4. Liu, Shasha & Wu, Yuhuan & Kong, Gaowen, 2024. "Politics and Robots," International Review of Financial Analysis, Elsevier, vol. 91(C).
    5. Yan, Xueling & Yu, Shule & Zheng, Xing, 2025. "Is government subsidy efficient? Evidence from SMEs' automation in China," China Economic Review, Elsevier, vol. 94(PB).
    6. Martin Lábaj & Tomáš Oleš & Gabriel Procházka, 2025. "Impact of robots and artificial intelligence on labor and skill demand: evidence from the UK," Eurasian Business Review, Springer;Eurasia Business and Economics Society, vol. 15(4), pages 953-1001, December.
    7. Röser, Florian & Niemann, Stefan & Angelini, Daniele, 2023. "Fiscal Policy and Human Capital in the Race Against the Machine," VfS Annual Conference 2023 (Regensburg): Growth and the "sociale Frage" 277672, Verein für Socialpolitik / German Economic Association.
    8. Mann, Katja & Pozzoli, Dario, 2024. "Robots and immigration," Journal of Economic Behavior & Organization, Elsevier, vol. 227(C).
    9. He, Chao & Zhou, Zhongsheng & Jian, Fangfang & Qiu, Yuhan, 2025. "Robots and cost of equity: Evidence from China," China Economic Review, Elsevier, vol. 94(PB).
    10. Tim Hinks, 2024. "Artificial Intelligence Perceptions and Life Satisfaction," Journal of Happiness Studies, Springer, vol. 25(1), pages 1-14, February.
    11. Jurkat, Anne & Klump, Rainer & Schneider, Florian, 2025. "Robots and wages: A meta-analysis," Structural Change and Economic Dynamics, Elsevier, vol. 75(C), pages 541-567.
    12. Ana Abeliansky & Klaus Prettner & Ernesto Rodríguez Crespo, 2024. "Climate change and automation: the emission effects of robot adoption," Department of Economics Working Papers wuwp370, Vienna University of Economics and Business, Department of Economics.
    13. Hidalgo, Camila & Micco, Alejandro, 2024. "Computerization, offshoring and trade: The effect on developing countries," World Development, Elsevier, vol. 180(C).
    14. Alex Chernoff & Gabriela Galassi, 2023. "Digitalization: Labour Markets," Discussion Papers 2023-16, Bank of Canada.
    15. Philipp Hohn & Torben Klarl, 2025. "Knowledge obsolescence, human capital inequality, and growth: A network perspective in an automated knowledge society," Bremen Papers on Economics & Innovation 2503, University of Bremen, Faculty of Business Studies and Economics.
    16. Oesch, David & Walser, Tanja, 2025. "The impact of automation on firms' reporting quality," Journal of Corporate Finance, Elsevier, vol. 92(C).
    17. Zhang, Su & Wang, Xiaolin & Xia, Yan & Wang, Huijuan, 2025. "The AI Redemption: How technology is rewriting the rules of cross-industry labor mobility," International Review of Economics & Finance, Elsevier, vol. 103(C).
    18. Qiao, Xiaole & He, Yang & Du, Qiang, 2025. "How does the urban digital economy drive labor allocation in China?—A perspective of factor mobility between digital and non-digital enterprises," Economic Analysis and Policy, Elsevier, vol. 85(C), pages 1159-1175.
    19. Thomas W. Bates & Fangfang Du & Jessie Jiaxu Wang, 2025. "Workplace Automation and Corporate Liquidity Policy," Management Science, INFORMS, vol. 71(2), pages 1287-1314, February.
    20. Bloom, David E. & Prettner, Klaus & Saadaoui, Jamel & Veruete, Mario, 2025. "Artificial intelligence and the skill premium," Finance Research Letters, Elsevier, vol. 81(C).

    More about this item

    Keywords

    ;
    ;
    ;
    ;
    ;
    ;

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:finlet:v:65:y:2024:i:c:s1544612324005312. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/locate/frl .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.