Multinationals, Robots, and the Labor Share

Fabrizio Leone

No 11396, CESifo Working Paper Series from CESifo

Abstract: Using a panel of Spanish manufacturing firms covering the 1990-2017 period, I document new evidence about affiliates of multinational enterprises (MNEs): after being acquired, they exhibit a higher propensity to use robots, which leads to a reduction in their labor share. These effects are identified using a matched event-study design, which accounts for selection into multinational ownership and robot adoption. The findings are consistent with a model of robot adoption choices by heterogeneous firms and hold even after considering other explanations for the labor share decline. The estimates imply that without MNEs, the reduction in the manufacturing labor share over the sample period would have been 8% smaller. Multinational-induced robot adoption explains about one-third of the overall impact of multinational activity on the labor share.

Keywords: multinational enterprises; globalization; robots; labor share (search for similar items in EconPapers)
JEL-codes: F23 F66 O33 (search for similar items in EconPapers)
Date: 2024
New Economics Papers: this item is included in nep-int and nep-tid
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