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Beyond the modern productivity paradox: The effect of robotics technology on firm-level total factor productivity in China

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  • Zhang, Yi
  • Wang, Ting
  • Liu, Chun

Abstract

This study aims to provide firm-level evidence on the burgeoning debate about the productivity effect of robotics technology. Taking China as an example, we find that city-level robot exposure plays a significant role in augmenting total factor productivity for firms in industries with high degrees of task replaceability. The results of the mechanism analysis further reveal that firms with substantial exposure to robotics technology are incentivized to improve their innovation performance and cultivate human capital. Conversely, there is evidence that firms characterized by low task replaceability experience a reduction in productivity as a consequence of robot exposure, potentially attributable to the effect of inter-industry resource reallocation. These findings offer empirical support for theoretical arguments regarding the productivity enhancements stemming from the development of robotics technology, while also shedding light on strategies to elevate productivity through the adoption of new technologies.

Suggested Citation

  • Zhang, Yi & Wang, Ting & Liu, Chun, 2024. "Beyond the modern productivity paradox: The effect of robotics technology on firm-level total factor productivity in China," Journal of Asian Economics, Elsevier, vol. 90(C).
    • Handle: RePEc:eee:asieco:v:90:y:2024:i:c:s1049007823001124
    DOI: 10.1016/j.asieco.2023.101692
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    More about this item

    Keywords

    Industrial robots; Total factor productivity; Task replaceability; Resource reallocation; China;
    All these keywords.

    JEL classification:

    • D24 - Microeconomics - - Production and Organizations - - - Production; Cost; Capital; Capital, Total Factor, and Multifactor Productivity; Capacity
    • O33 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes
    • O14 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Industrialization; Manufacturing and Service Industries; Choice of Technology

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