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Foreign Ownership and Robot Adoption

Author

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  • Fabrizio Leone

Abstract

This paper shows that multinational enterprises (MNEs) spur the adoption of industrial robots. First, I document a positive and robust correlation between multinational production and robot adoption using a new cross-country industry-level panel. Second, using detailed data about Spanish manufacturing, I combine a difference-in-differences approach with a propensity score reweighing estimator and provide evidence that firms switching from domestic to foreign ownership become about 10% more likely to employ robots. In terms of mechanism, increased foreign market access via the parental network generates incentives to scale-up production, and robot adoption is one way to achieve this goal. An empirical model of rm investment reveals that multinational-induced robot adoption raises productivity but decreases the labor share at the industry level. Theseresults provide new evidence about the efficiency versus equity trade-off that policymakers face when attracting MNEs.

Suggested Citation

  • Fabrizio Leone, 2022. "Foreign Ownership and Robot Adoption," Working Papers ECARES 2022-17, ULB -- Universite Libre de Bruxelles.
  • Handle: RePEc:eca:wpaper:2013/344246
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