How Artificial Intelligence Technology Affects Productivity and Employment: Firm-level Evidence from Taiwan

Chih-Hai Yang

Research Policy, 2022, vol. 51, issue 6

Abstract: The effects of the rapid development of artificial intelligence (AI), a general-purpose technology, on firm performance is an emerging and crucial issue. This study examines the impact of AI technology on firms’ productivity and employee profiles. We use the keyword-matching method to parse the text of Taiwan patent grants, and obtain matched firm-level data on AI innovations in Taiwan's electronics industry for the 2002–2018 period. Empirical estimations indicate that AI technology is positively associated with productivity and employment. Meanwhile, non-AI patents also generate pro-productivity and pro-employment effects with a magnitude similar to that of AI technology. Inventing AI technologies crucially alters firms’ workforce compositions, which reduce the share of labor force with educational qualifications of college level and below. Robustness checks reaffirm these findings.

Keywords: Artificial intelligence; Productivity; Employment (search for similar items in EconPapers)
JEL-codes: J23 O33 (search for similar items in EconPapers)
Date: 2022
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Citations: View citations in EconPapers (36)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:respol:v:51:y:2022:i:6:s0048733322000634

DOI: 10.1016/j.respol.2022.104536

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