Industrial robots, supply chain spillover effect and firm employment: Evidence from China

This paper constructs the supplier-customer matching data for Chinese listed firms to examine the impact of the customer robot adoption on the supplier employment from the perspective of supply chain. On the one hand, customer robot adoption generates negative capital spillover effect, decreasing the employment of suppliers through financial distress contagion and relative bargaining power reduction; on the other hand, customer robot adoption generates positive information spillover effect, enhancing the employment of high-skilled labor of suppliers through market signaling and information sharing. The empirical results show that the capital spillover effect of customer robot adoption is dominant, and thus customer robot adoption significantly reduces the employment of suppliers. Furthermore, we find that customer concentration can reinforce the supply spillover effect, and customer robot adoption has a stronger employment disincentive effect on supplier firms that are in low-tech industries, highly labor-intensive, located in regions with less market segmentation, and geographically close to each other. This paper further investigates the impact of customer robot adoption on the structure of supplier employment, and demonstrate that customer robot adoption significantly increases the proportion of suppliers’ high-skilled labor force, which helps to optimize the structure of supplier employment.