Robots and Export Quality

Timothy DeStefano and Jonathan Timmis ()

No 9678, Policy Research Working Paper Series from The World Bank

Abstract: Robots are rapidly becoming a key part of manufacturing in developed and emerging economies. This paper examines a new channel for how automation can affect international trade: quality upgrading. Automation can reduce production errors, particularly of repetitive processes, leading to higher quality products. The effects of robot use on export quality are estimated, by combining cross-country and cross-industry data on industrial robots with detailed Harmonized System 10-digit trade data. Robot diffusion in (preexisting) foreign customers is used as an instrumental variable to predict robot adoption in the home country-industry. The findings show that robot diffusion leads to increases in the quality of exported products. Quality improvements are predominantly driven by the upgrading of developing country exports; and within countries, quality improvements are driven by upgrading of (initially) lower-quality exports of developed and developing countries. The paper also finds some differences in the type of robots—sophisticated or more basic—associated with quality gains in developing and developed economies.

Keywords: International Trade and Trade Rules; Food&Beverage Industry; Plastics&Rubber Industry; Business Cycles and Stabilization Policies; Textiles; Apparel&Leather Industry; Pulp&Paper Industry; Common Carriers Industry; Construction Industry; General Manufacturing; Industrial and Consumer Services and Products; Transport and Trade Logistics; Labor Markets (search for similar items in EconPapers)
Date: 2021-05-27
New Economics Papers: this item is included in nep-int
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Citations: View citations in EconPapers (9)

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