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Robots on Sale: The effect of tax policy on robot adoption and employment

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  • ADACHI Daisuke
  • KAWAGUCHI Daiji
  • SAITO Yukiko

Abstract

We study the effect of a tax policy on adopting industrial robots and firm performance, notably in terms of employment. Combining the policy variation in the Tax Credit for Promoting Productivity-Enhancing Equipment Investment (TC-PPEI) in Japan and newly collected Japanese firm-level longitudinal data on robot adoption, we find that the firms eligible for the TC-PPEI increased the adoption of robots. Our event-study analysis reveals that when firms adopt robots, they do not decrease the total number of workers but significantly increase employment after 1-3 years of adoption events and sales. Our results suggest that adopting robots can create employment instead of destroying it at the firm level.

Suggested Citation

  • ADACHI Daisuke & KAWAGUCHI Daiji & SAITO Yukiko, 2024. "Robots on Sale: The effect of tax policy on robot adoption and employment," Discussion papers 24047, Research Institute of Economy, Trade and Industry (RIETI).
    • Handle: RePEc:eti:dpaper:24047
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    1. repec:hal:spmain:info:hdl:2441/170cd4sul89ddpnfuomvfm0jc0 is not listed on IDEAS
    2. Alessandra Bonfiglioli & Rosario Crinò & Harald Fadinger & Gino Gancia, 2020. "Robot Imports and Firm-Level Outcomes," CRC TR 224 Discussion Paper Series crctr224_2020_243, University of Bonn and University of Mannheim, Germany.
    3. Philippe Aghion & Céline Antonin & Simon Bunel & Xavier Jaravel, 2020. "What Are the Labor and Product Market Effects of Automation? New Evidence from France," SciencePo Working papers Main hal-03403062, HAL.
    4. repec:hal:spmain:info:hdl:2441/3n1gbsj6rs80ipqv9d42nfd0ge is not listed on IDEAS
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