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Robot adoption and employment adjustment: Firm-level evidence from China

Author

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  • Wang, Ting
  • Zhang, Yi
  • Liu, Chun
Abstract
This paper investigates the impact of robot adoption on employment adjustment at the firm level in China. By employing an instrumental variable that exploits the source of variation in robot adoption across firms, our analysis reveals that the utilization of industrial robots leads to an increase in employment within firms, particularly with regard to highly educated and skilled personnel. Furthermore, an exploration of the underlying mechanisms demonstrates that this positive employment effect is primarily attributed to the productivity effect of robot adoption, resulting in increased productivity and heightened labor demand. However, there is limited empirical support for the negative displacement effect wherein robots replace workers. Additionally, our investigation uncovers evidence of technology-driven intra-industry labor reallocation to robot-adopting firms from their non-adopting counterparts.

Suggested Citation

  • Wang, Ting & Zhang, Yi & Liu, Chun, 2024. "Robot adoption and employment adjustment: Firm-level evidence from China," China Economic Review, Elsevier, vol. 84(C).
    • Handle: RePEc:eee:chieco:v:84:y:2024:i:c:s1043951x24000269
    DOI: 10.1016/j.chieco.2024.102137
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    Cited by:

    1. Lin, Boqiang & Xu, Chongchong, 2024. "Enhancing energy-environmental performance through industrial intelligence: Insights from Chinese prefectural-level cities," Applied Energy, Elsevier, vol. 365(C).

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    More about this item

    Keywords

    Robot adoption; Employment adjustment; Firm productivity; China;
    All these keywords.

    JEL classification:

    • D22 - Microeconomics - - Production and Organizations - - - Firm Behavior: Empirical Analysis
    • D24 - Microeconomics - - Production and Organizations - - - Production; Cost; Capital; Capital, Total Factor, and Multifactor Productivity; Capacity
    • J21 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Force and Employment, Size, and Structure
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • O33 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes

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