The impact of automation on firms' reporting quality

David Oesch and Tanja Walser

Journal of Corporate Finance, 2025, vol. 92, issue C

Abstract: This paper investigates how advances in automation technologies affect firms' information environments. Using an instrumental variable research design that exploits exogenous variation in industrial robot adoption, we present robust evidence that an increase in exposure to robots causes firms to lower financial reporting quality. As automation technology adoption entails adoption costs, we find that the effect is attributable to management's strategic increase of financial reporting discretion. In light of the rapid rise of automation technologies our paper provides important insights how such technologies impact firms' reporting quality.

Keywords: Automation technologies; Robots; Financial reporting quality; Instrumental variable (search for similar items in EconPapers)
JEL-codes: M41 O31 O33 (search for similar items in EconPapers)
Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:eee:corfin:v:92:y:2025:i:c:s0929119924001457

DOI: 10.1016/j.jcorpfin.2024.102683

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