IDEAS home Printed from https://ideas.repec.org/a/inm/ormnsc/v71y2025i2p1287-1314.html
   My bibliography  Save this article

Workplace Automation and Corporate Liquidity Policy

Author

Listed:
  • Thomas W. Bates

    (Finance, W. P. Carey School of Business, Arizona State University, Tempe, Arizona 85287)

  • Fangfang Du

    (College of Business and Economics, California State University, Fullerton, California 92831)

  • Jessie Jiaxu Wang

    (Board of Governors of the Federal Reserve System, Washington, District of Columbia 20551)

Abstract

Using an occupational probability of computerization, we measure a firm’s ability to replace labor with automated capital. Our evidence suggests that the potential to automate a workforce enhances operating flexibility, allowing firms to hold less precautionary cash. To provide evidence for this mechanism, we exploit the 2011–2012 Thailand hard drive crisis as an exogenous shock to the cost of automation. In addition, the negative relation between prospective automation and cash holdings is greater for firms with a lower expected cost of worker displacement and greater labor-induced operating leverage.

Suggested Citation

  • 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.
    • Handle: RePEc:inm:ormnsc:v:71:y:2025:i:2:p:1287-1314
    DOI: 10.1287/mnsc.2021.03902
    as

    Download full text from publisher

    File URL: http://dx.doi.org/10.1287/mnsc.2021.03902
    Download Restriction: no
    File URL: https://libkey.io/10.1287/mnsc.2021.03902?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
    ---><---

    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:inm:ormnsc:v:71:y:2025:i:2:p:1287-1314. 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.

    We have no bibliographic references for this item. You can help adding them by using 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: Chris Asher (email available below). General contact details of provider: https://edirc.repec.org/data/inforea.html .

    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.