Robots & the Rise of European Superstar Firms

Jens Suedekum and Nicole Woessner

No 118, European Economy - Discussion Papers from Directorate General Economic and Financial Affairs (DG ECFIN), European Commission

Abstract: We estimate the impact of a recent digital automation technology - industrial robotics - on the distribution of productivity and markups within industries. Our empirical analysis combines data on the industry-level stock of industrial robots with firms' balance sheet data for six European countries from 2004 to 2013. We find that robots dis-proportionally raise productivity in those firms that are already most productive to begin with. Those firms are able to increase their markups, while markups tend to decline for less profitable firms within the same industry, country and year. We also show that industrial robots contribute to the falling aggregate labour income share through a rising concentration of industry sales. In short, our paper suggests that robots boost the emergence of superstar firms within European manufacturing, and thereby shifts the functional income distribution away from wages and towards profits.

JEL-codes: D4 L11 O33 (search for similar items in EconPapers)
Pages: 54 pages
Date: 2019-10
New Economics Papers: this item is included in nep-eur, nep-ind, nep-pay and nep-tid
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:euf:dispap:118

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