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Foreign Ownership and Robot Adoption

Fabrizio Leone

No 2022-17, Working Papers ECARES from ULB -- Universite Libre de Bruxelles

Abstract: This paper shows that multinational enterprises (MNEs) spur the adoption of industrial robots. First, I document a positive and robust correlation between multinational production and robot adoption using a new cross-country industry-level panel. Second, using detailed data about Spanish manufacturing, I combine a difference-in-differences approach with a propensity score reweighing estimator and provide evidence that firms switching from domestic to foreign ownership become about 10% more likely to employ robots. In terms of mechanism, increased foreign market access via the parental network generates incentives to scale-up production, and robot adoption is one way to achieve this goal. An empirical model of rm investment reveals that multinational-induced robot adoption raises productivity but decreases the labor share at the industry level. Theseresults provide new evidence about the efficiency versus equity trade-off that policymakers face when attracting MNEs.

Keywords: Foreign Ownership; Industrial Robots; Total Factor Productivity; Factor-Biased Productivity; Labor Share (search for similar items in EconPapers)
Pages: 73 p.
Date: 2022-05
New Economics Papers: this item is included in nep-ene, nep-int, nep-lma and nep-tid
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