Robot Adoption, Organizational Capital and the Productivity Paradox

Rodimiro Rodrigo ()

Working Papers from Georgetown University, Department of Economics

Abstract: Major technological changes have come with an adjustment period of stagnant productivity before the economy operates at its full potential. The mechanism of this adoption process is still not well understood. Using event studies, I document that productivity increases with a five-year lag after the adoption of industrial robots in Brazilian local labor markets. Combining employer-employee matched data with a novel measure of robot adoption, I provide first evidence of establishment-level labor reorganization and organizational capital depreciation induced by the automation process. During the five years after adoption, labor switching across occupations increases within firms, moving from production to support activities. I show that firms’ organizational capital measured by workers’ firm-occupation-specific experience depreciates and then slowly re-accumulates. When these processes stop, the productivity gains reach their maximum. I use these results to estimate a general equilibrium model with heterogeneous firms, endogenous robot adoption, and organizational capital accumulation. The model accounts for the productivity paradox, the diffusion of industrial robots, and the change in the aggregate skill demand. The model highlights the role of organizational costs accompanying the adoption of new technologies. I illustrate its usefulness by using it to characterize the implications of the “innovator’s dilemma.” Classification- E24, J62, L23, O32, O33

Keywords: Labor Productivity; Occupational Mobility; Technological Change; Automation (search for similar items in EconPapers)
Pages: 50
Date: 2022-02-27
New Economics Papers: this item is included in nep-dge, nep-eff, nep-mac and nep-tid
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Citations: View citations in EconPapers (4)

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Persistent link: https://EconPapers.repec.org/RePEc:geo:guwopa:gueconwpa~22-22-03

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