Robots and Firms

47 Pages Posted: 25 Apr 2019

See all articles by Michael Koch

Michael Koch

University of Bayreuth

Ilya Manuylov

Aarhus University - Department of Economics and Business

Marcel Smolka

Aarhus University

Date Written: 2019

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.

Keywords: automation, robots, firms, productivity, technology

JEL Classification: D220, F140, J240, O140

Suggested Citation

Koch, Michael and Manuylov, Ilya and Smolka, Marcel, Robots and Firms (2019). CESifo Working Paper No. 7608. Available at SSRN: https://ssrn.com/abstract=3377705

Michael Koch (Contact Author)

University of Bayreuth ( email )

Universitatsstr 30
Bayreuth, D-95447
Germany

Ilya Manuylov

Aarhus University - Department of Economics and Business ( email )

Fuglesangs Alle 4
Aarus, 8210
Denmark

Marcel Smolka

Aarhus University ( email )

Nordre Ringgade 1
DK-8000 Aarhus C
Denmark

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