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Institutions, Holdup and Automation

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  • Giorgio Presidente

Abstract

This paper documents a positive relationship between labor-friendly institutions and investment in industrial robots in a sample of advanced economies. Institutions explain a substantial proportion of cross-country variation in automation. The relationship between institutions and robots is stronger in sunk cost-intensive industries, where producers are more vulnerable to holdup. This suggests that automation is used by producers as a tool to thwart rent appropriation by labor.

Suggested Citation

  • Giorgio Presidente, 2019. "Institutions, Holdup and Automation," CESifo Working Paper Series 7834, CESifo.
    • Handle: RePEc:ces:ceswps:_7834
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    Cited by:

    1. 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).
    2. 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).
    3. 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.
    4. Bürgisser, Reto, 2023. "Policy Responses to Technological Change in the Workplace," SocArXiv kwxn2, Center for Open Science.
    5. 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.
    6. Belloc, Filippo & Burdin, Gabriel & Landini, Fabio, 2020. "Robots and Worker Voice: An Empirical Exploration," IZA Discussion Papers 13799, Institute of Labor Economics (IZA).

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    More about this item

    Keywords

    automation; robots; holdup; institutions; unions; sunk costs; appropriability; bargaining; frictions; rents; technology adoption;
    All these keywords.

    JEL classification:

    • O33 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes
    • O43 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Institutions and Growth
    • O57 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Comparative Studies of Countries
    • J50 - Labor and Demographic Economics - - Labor-Management Relations, Trade Unions, and Collective Bargaining - - - General

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