Robots, Automation and the demand for Industrial Space

Abstract

We utilize the data set developed by Acemoglu & Restrepro (2017) depicting the likely adoption rate of robots by firms in each US MSA. Our focus is on the impact of this automation metric on the market for industrial real estate (factories and warehouses). We get similar results to their negative impacts of automation on local labor markets. Over 1993-2007, MSA with an industry mix that that more rapidly automating are associated with significantly less construction of new industrial space, less growth in overall occupied space, and lower increases in industrial space rents. The use of industry mix based “estimated” robot adoption, and a wide range of applied control variables, suggests that this relationship is causal.

Keywords: Automation, Real Estate

JEL Classification: R, L