Robot Adoption and Innovation Activities (last revised: December 2023)
Francesco Rentocchini and
Munich Papers in Political Economy from Munich School of Politics and Public Policy and the School of Management at the Technical University of Munich
We investigate the unexplored relationship between robot technology adoption and product innovation. We exploit Spanish firm-level data on robot adoption and use a staggered timing difference-in-differences, supported by an instrumental variable approach. Instead of an enabling effect, we find a negative association between robot adoption and the probability to introduce product innovations, as well as their number. The result is particularly significant for larger, established, and non-high-tech firms. In line with industry evolution models, we rationalise and interpret the findings suggesting that a key mechanism at work in the robotisation-innovation nexus are diseconomies of scope fuelled by capacity-increasing investments. We also discuss whether industrial robots in our data feature enabling capabilities at all. Our results have important implications for understanding the role of robots in firms’ operations and strategies, as well as for policy design.
Keywords: robots; automation; product innovation; diseconomies of scope; Spain (search for similar items in EconPapers)
JEL-codes: O31 O33 (search for similar items in EconPapers)
Pages: 47 pages
New Economics Papers: this item is included in nep-cse, nep-eur, nep-ino, nep-sbm and nep-tid
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Persistent link: https://EconPapers.repec.org/RePEc:aiw:wpaper:21
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