The dynamics of automation adoption: Firm-level heterogeneity and aggregate employment effects

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

European Economic Review, 2025, vol. 173, issue C

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-in-differences design exploiting import lumpiness in product categories linked to automation technologies (including robots). We find a positive average adoption effect on the adopters’ employment: firms are, on average, around 3% larger in terms of employment after an automation spike. Crucially, the employment effect is heterogeneous across firms: a positive effect is predominant among small firms, which are around 5% larger five years after the spike; on the contrary, a negative displacement effect is predominant among medium and large firms, with an employment contraction at five years of around −4%. This result can shed light on one potential reason behind the mixed results found in previous studies, which often rely on samples with different size distributions. We complete the framework with a 5-digit sector-level analysis showing that adopting automation technologies has an overall weak negative effect on aggregate employment, and with an analysis of the competition effects of automation, showing that non-adopters suffer a loss in sales and employment.

Keywords: Automation; Employment; Firm heterogeneity; Imports; Technology adoption; Robots (search for similar items in EconPapers)
JEL-codes: D24 J23 L25 O33 (search for similar items in EconPapers)
Date: 2025
References: Add references at CitEc
Citations:

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S0014292124002721
Full text for ScienceDirect subscribers only

Related works:
Working Paper: The Dynamics of Automation Adoption: Firm-Level Heterogeneity and Aggregate Employment Effects (2023)
Working Paper: The dynamics of automation adoption: Firm-level heterogeneity and aggregate employment effects (2023)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eee:eecrev:v:173:y:2025:i:c:s0014292124002721

DOI: 10.1016/j.euroecorev.2024.104943

Access Statistics for this article

European Economic Review is currently edited by T.S. Eicher, A. Imrohoroglu, E. Leeper, J. Oechssler and M. Pesendorfer

More articles in European Economic Review from Elsevier
Bibliographic data for series maintained by Catherine Liu ().