Robots on Sale: The effect of tax policy on robot adoption and employment

Daisuke Adachi, Daiji Kawaguchi and Yukiko Saito

Discussion papers from Research Institute of Economy, Trade and Industry (RIETI)

Abstract: We study the effect of a tax policy on adopting industrial robots and firm performance, notably in terms of employment. Combining the policy variation in the Tax Credit for Promoting Productivity-Enhancing Equipment Investment (TC-PPEI) in Japan and newly collected Japanese firm-level longitudinal data on robot adoption, we find that the firms eligible for the TC-PPEI increased the adoption of robots. Our event-study analysis reveals that when firms adopt robots, they do not decrease the total number of workers but significantly increase employment after 1-3 years of adoption events and sales. Our results suggest that adopting robots can create employment instead of destroying it at the firm level.

Pages: 28 pages
Date: 2024-04
New Economics Papers: this item is included in nep-bec, nep-pbe, nep-sbm and nep-tid
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Persistent link: https://EconPapers.repec.org/RePEc:eti:dpaper:24047

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