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Robots and Firms

Author

Listed:
  • Michael Koch

    (University of Bayreuth)

  • Ilya Manuylov

    (Department of Economics and Business Economics, Aarhus University, Denmark)

  • Marcel Smolka

    (Department of Economics and Business Economics, Aarhus University, Denmark)

Abstract

We study the implications of robot adoption at the level of individual firms using a rich panel data-set of Spanish manufacturing firms over a 27-year period (1990-2016). We focus on three central questions: (1) Which firms adopt robots? (2) What are the labor market effects of robot adoption at the firm level? (3) How does firm heterogeneity in robot adoption affect the industry equilibrium? To address these questions, we look at our data through the lens of recent attempts in the literature to formalize the implications of robot technology. As for the first question, we establish robust evidence that ex-ante larger and more productive firms are more likely to adopt robots, while ex-ante more skill-intensive firms are less likely to do so. As for the second question, we find that robot adoption generates substantial output gains in the vicinity of 20-25% within four years, reduces the labor cost share by 5-7%-points, and leads to net job creation at a rate of 10%. These results are robust to controlling for non-random selection into robot adoption through a difference-in-differences approach combined with a propensity score reweighting estimator. Finally, we reveal substantial job losses in firms that do not adopt robots, and a productivity-enhancing reallocation of labor across firms, away from non-adopters, and toward adopters.

Suggested Citation

  • Michael Koch & Ilya Manuylov & Marcel Smolka, 2019. "Robots and Firms," Economics Working Papers 2019-05, Department of Economics and Business Economics, Aarhus University.
  • Handle: RePEc:aah:aarhec:2019-05
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    References listed on IDEAS

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    More about this item

    Keywords

    Automation; Robots; Firms; Productivity; Technology;
    All these keywords.

    JEL classification:

    • D22 - Microeconomics - - Production and Organizations - - - Firm Behavior: Empirical Analysis
    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • O14 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Industrialization; Manufacturing and Service Industries; Choice of Technology

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