The Effects of Robotization on Foreign Direct Investment

Sungwoo Hong (), Wongi Kim () and Yeo Joon Yoon ()
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Sungwoo Hong: KOREA INSTITUTE FOR INTERNATIONAL ECONOMIC POLICY (KIEP), Postal: [30147] Building C Sejong National Research Complex 370 Sicheong-daero Sejong-si Korea,, https://www.kiep.go.kr/eng/
Wongi Kim: Sungshin Women's University, Postal: Donam Sujung Campus: 2 34 da-gil Bomun-ro Seongbuk-gu Seoul (02844) Tel. +82-920-7114 | Mia Woonjung Green Campus: 55 76 ga-gil Dobong-ro Gangbuk-gu Seoul (01133) Tel. +82 2-920-7870, https://www.sungshin.ac.kr/main_eng/index.do
Yeo Joon Yoon: Pusan National University, Postal: 2 Busandaehak-ro 63beon-gil Geumjeong-gu Busan 46241 Rep. of KOREA,, https://www.pusan.ac.kr/eng/CMS/Contents/Contents.do?mCode=MN072

No 22-4, Working Papers from Korea Institute for International Economic Policy

Abstract: This study aims to investigate the effects of robotization on foreign direct investment (FDI). We address this research question by providing a theoretical prediction derived from a simple model and then empirically testing our prediction. Theoretically, we found that an exogenous rise in industrial robots depresses both the robot rental rate and the domestic cost of task execution. Thus, it is more profitable to perform more tasks at home, leading to a decrease in FDI. Empirical results are summarized as follows. First, an increase in robotization in source countries negatively affects outward FDI. Second, this negative effect is not consistent across global regions.

Keywords: Robotization; FDI (search for similar items in EconPapers)
JEL-codes: F21 F23 (search for similar items in EconPapers)
Pages: 52 pages
Date: 2023-08-02
New Economics Papers: this item is included in nep-int
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Persistent link: https://EconPapers.repec.org/RePEc:ris:kiepwp:2022_004

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