Automation-Induced Innovation Shift

Lin Cong, Yao Lu, Hanqing Shi and Wu Zhu

No 34240, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: We study how exposure to automation affects the nature and level of corporate innovation, which informs how innovation begets innovation. We document that firms with high robot exposure alter their technological focus over time and shift innovative activities towards AI which automation naturally complements through data accumulation. The shift is more pronounced for firms with greater data generation or prior AI-related research experience. Because AI patents are more costly (e.g., in labor input), albeit more general and original, firms with high automation experience a significant rise in R&D expenditure but an initial drop in patent quantity, before benefiting—an innovation “J-Curve.” Our findings not only resolve the puzzle that globally firms invent less despite the greater research effort amidst rising automation, but also provides insights on the heterogeneous paths of innovation, all of which we rationalize in a parsimonious dynamic equilibrium model.

JEL-codes: G30 O36 (search for similar items in EconPapers)
Date: 2025-09
New Economics Papers: this item is included in nep-sbm and nep-tid
Note: CF PR
References: Add references at CitEc
Citations:

Downloads: (external link)
http://www.nber.org/papers/w34240.pdf (application/pdf)
Access to the full text is generally limited to series subscribers, however if the top level domain of the client browser is in a developing country or transition economy free access is provided. More information about subscriptions and free access is available at http://www.nber.org/wwphelp.html. Free access is also available to older working papers.

Related works:
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:nbr:nberwo:34240

Ordering information: This working paper can be ordered from
http://www.nber.org/papers/w34240
The price is Paper copy available by mail.

Access Statistics for this paper

More papers in NBER Working Papers from National Bureau of Economic Research, Inc National Bureau of Economic Research, 1050 Massachusetts Avenue Cambridge, MA 02138, U.S.A.. Contact information at EDIRC.
Bibliographic data for series maintained by ().