Research Seminar

Microeconomic implications of robot adoption: A firm-level perspective — Marcel Smolka

16 Jun 2020


Marcel Smolka (University of Flensburg)


We study the microeconomic implications of robot adoption using a rich panel data-set of Spanish manufacturing firms over a 27-year period (1990-2016). We provide causal evidence on two central questions: (1) Which firm characteristics prompt firms to adopt robots? (2) What is the (partial equilibrium) impact of robots on adopting firms relative to non-adopting firms? 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 for positive selection, i.e., ex-ante better performing firms (measured through output and labor productivity) are more likely to adopt robots. On the other hand, conditional on size, 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. To further validate these results, we also offer structural estimates of total factor productivity (TFP) where robot technology enters the (endogenous) productivity process of firms. The results demonstrate a positive causal effect of robots on productivity, as well as a complementarity between robots and exporting in boosting productivity. We use these results to document that the surprising decline in aggregate TFP in Spanish manufacturing between 1995 and 2007 can be largely attributed to non-adopters.


Michael Koch (Aarhus University) — Ilya Manuylov (Aarhus University) — Marcel Smolka (University of Flensburg)


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Link to the paper here.