Is this time different?: how Industry 4.0 affects firms' labor productivity

Marco Bettiol, Mauro Capestro, Eleonora Di Maria and Roberto Ganau

LSE Research Online Documents on Economics from London School of Economics and Political Science, LSE Library

Abstract: Does Industry 4.0 technology adoption push firms’ labor productivity? We contribute to the literature debate—mainly focused on robotics and large firms—by analyzing adopters’ labor productivity returns when micro, small, and medium enterprises (MSME) are concerned. We employ original survey data on Italian MSMEs’ adoption investments related to a multiplicity of technologies and rely on a difference-in-differences estimation strategy. Results highlight that Industry 4.0 technology adoption leads to a 7% increase in labor productivity. However, this effect decreases over time and is highly heterogeneous with respect to the type, the number, and the variety of technologies adopted. We also identify potential channels explaining the labor productivity returns of technology adoption: cost-related efficiency, new knowledge creation, and greater integration/collaboration both within the firm and with suppliers.

Keywords: Industry 4.0; Italy; labor productivity; MSME; technology adoption (search for similar items in EconPapers)
JEL-codes: J24 L23 L25 O32 (search for similar items in EconPapers)
Pages: 19 pages
Date: 2024-04-01
New Economics Papers: this item is included in nep-bec, nep-eec, nep-eff, nep-hrm, nep-sbm and nep-tid
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

Published in Small Business Economics, 1, April, 2024, 62(4), pp. 1449-1467. ISSN: 0921-898X

Downloads: (external link)
http://eprints.lse.ac.uk/124545/ Open access version. (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:ehl:lserod:124545

Access Statistics for this paper

More papers in LSE Research Online Documents on Economics from London School of Economics and Political Science, LSE Library LSE Library Portugal Street London, WC2A 2HD, U.K.. Contact information at EDIRC.
Bibliographic data for series maintained by LSERO Manager ().