The Dynamics of Automation Adoption: Firm-Level Heterogeneity and Aggregate Employment Effects

Laura Bisio (), Angelo Cuzzola, Marco Grazzi and Daniele Moschella

No 10697, CESifo Working Paper Series from CESifo

Abstract: We investigate the impact of investment in automation-related goods on adopting and non-adopting firms in the Italian economy during 2011-2019. We integrate datasets on trade activities, firms’, and workers’ characteristics for the population of Italian importing firms and estimate the effects on adopters’ outcomes within a difference-indifferences design exploiting import lumpiness in product categories linked to automation and AI technologies. We find a positive average adoption effect on the adopters’ employment and on the value-added and average wage, whereas sales and productivity increase after an initial drop with a net positive effect five years after adoption. Crucially, the employment effect is heterogeneous across firms: a positive scale effect is predominant among small firms, whereas a negative displacement effect is predominant among medium and large firms. We complete the framework with a 5-digit sector-level analysis showing that adopting automation technologies has an overall negative effect on aggregate employment.

Keywords: automation; employment; firm heterogeneity; imports; technology adoption (search for similar items in EconPapers)
JEL-codes: D24 J23 L25 O33 (search for similar items in EconPapers)
Date: 2023
New Economics Papers: this item is included in nep-bec, nep-eff, nep-eur, nep-lma, nep-sbm and nep-tid
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

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Related works:
Journal Article: The dynamics of automation adoption: Firm-level heterogeneity and aggregate employment effects (2025)
Working Paper: The dynamics of automation adoption: Firm-level heterogeneity and aggregate employment effects (2023)
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