Robot adoption and firm's capacity utilization: Evidence from China

Hua Wang, Lingtao Liao and Ji Wu

Pacific-Basin Finance Journal, 2023, vol. 82, issue C

Abstract: We examine the impact of a firm's robot adoption on the capacity utilization rate for Chinese manufacturing firms between 2011 and 2019. Our result shows a significant positive relationship between a firm's robot adoption and capacity utilization rate. Further analysis finds that the main finding is only significant for non-SOEs, firms with low supply-demand balance, low-tech firms, firms in labor-intensive industries, high financial constraints firms, high-profit volatility firms, and under-hiring firms. The path analysis suggests that a firm's robot adoption improves the firm's capacity utilization rate by reducing its labor investment inefficiency. Our main result remains significant on the industrial level. Finally, the main finding held after alleviating the endogeneity concerns and several robustness tests.

Keywords: Capacity utilization; Industrial robots; Robot adoption; Labor investment inefficiency; China (search for similar items in EconPapers)
Date: 2023
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Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:pacfin:v:82:y:2023:i:c:s0927538x23002676

DOI: 10.1016/j.pacfin.2023.102196

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