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Can Industrial Robot Applications Enhance Corporate Capital Allocation Efficiency?—Based on the Perspective of Cash Holdings

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  • Lin Liang
  • Peng Liang

Abstract

Industrial robots play a vital role in transforming and upgrading the manufacturing industry. They harness automation technologies to drive industrial production and enhance their value through innovations in production tools and knowledge. This paper analyzes annual data from China's A‐share nonfinancial manufacturing listed companies during the period from 2007 to 2019, examining the impact of industrial robot applications on corporate cash holdings. The study discovers that the application of industrial robots notably reduces corporate cash holdings, thereby confirming the effect of capital allocation. The analysis rules out the possibility that this reduction occurs through alleviating agency problems. Mechanism analysis reveals that the application of industrial robots reduces cash holdings for precautionary motives by reducing labor leverage and enhancing labor productivity and operational efficiency. Additional tests reveal that the reduction in corporate cash holdings due to industrial robot applications is more pronounced in enterprises with intense market competition, labor‐intensive and nonstate‐owned enterprises. This study deepens the research focus on industrial robot applications and corporate cash holdings, providing a theoretical basis for policymakers to promote technological innovation and industrial advancement.

Suggested Citation

  • Lin Liang & Peng Liang, 2026. "Can Industrial Robot Applications Enhance Corporate Capital Allocation Efficiency?—Based on the Perspective of Cash Holdings," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 47(2), pages 438-456, March.
    • Handle: RePEc:wly:mgtdec:v:47:y:2026:i:2:p:438-456
    DOI: 10.1002/mde.70046
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