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Institutions, Holdup, and Automation

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  • Giorgio Presidente

Abstract

What drives investment in automation technologies? This paper documents a positive relationship between labor-friendly institutions and investment in industrial robots in a sample of advanced and developing economies. Institutions explain a substantial share of cross-country variation in automation. The relationship between institutions and robots is stronger in sunk cost-intensive industries, where producers are vulnerable to holdup. The result suggests that one reason for producers to invest in automation is to thwart rent appropriation by labor.

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  • Giorgio Presidente, 2023. "Institutions, Holdup, and Automation," Industrial and Corporate Change, Oxford University Press and the Associazione ICC, vol. 32(4), pages 831-847.
    • Handle: RePEc:oup:indcch:v:32:y:2023:i:4:p:831-847.
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    Cited by:

    1. Belloc, Filippo & Burdin, Gabriel & Cattani, Luca & Ellis, William & Landini, Fabio, 2022. "Coevolution of job automation risk and workplace governance," Research Policy, Elsevier, vol. 51(3).
    2. Bürgisser, Reto, 2023. "Policy Responses to Technological Change in the Workplace," SocArXiv kwxn2, Center for Open Science.
    3. Burdin, Gabriel & Dughera, Stefano & Landini, Fabio & Belloc, Filippo, 2023. "Contested Transparency: Digital Monitoring Technologies and Worker Voice," GLO Discussion Paper Series 1340, Global Labor Organization (GLO).
    4. Belloc, Filippo & Burdin, Gabriel & Landini, Fabio, 2020. "Robots and Worker Voice: An Empirical Exploration," IZA Discussion Papers 13799, Institute of Labor Economics (IZA).
    5. Samwer, Julia & Chen, Chinchih, 2020. "How labor market institutions affect technological choices," ILE Working Paper Series 42, University of Hamburg, Institute of Law and Economics.
    6. Chen, Chinchih & Frey, Carl Benedikt & Presidente, Giorgio, 2022. "Automation or globalization? The impacts of robots and Chinese imports on jobs in the United Kingdom," Journal of Economic Behavior & Organization, Elsevier, vol. 204(C), pages 528-542.

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    More about this item

    JEL classification:

    • O32 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Management of Technological Innovation and R&D
    • O33 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes
    • L16 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Industrial Organization and Macroeconomics; Macroeconomic Industrial Structure
    • J50 - Labor and Demographic Economics - - Labor-Management Relations, Trade Unions, and Collective Bargaining - - - General
    • O57 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Comparative Studies of Countries

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