Automation and Manufacturing Performance in a Developing Country

Massimiliano Calì and Giorgio Presidente

No 9653, Policy Research Working Paper Series from The World Bank

Abstract: This paper provides novel evidence on the economic impact of industrial automation in a large developing economy. It combines labor force survey and manufacturing plant-level data from Indonesia over 2008–15, when the country experienced a rapid increase in imports of robots. The findings show a positive impact of robots on various measures of plants’ performance and integration into global value chains. In contrast to existing evidence on advanced and emerging economies, these plant-level impacts result in an increase in manufacturing and services employment at the local level. Such employment effects are consistent with evidence of positive employment spillovers from downstream robot-adopting plants, which help extend the benefits of automation to non-adopting plants. The spillover effects may provide a rationale to incentivize manufacturing firms to adopt industrial robots. The results also suggest that the gains from automation are not equally shared: adoption of robots is associated with a reduction in the labor share in value added and an increase in skill wage premia.

Keywords: Educational Sciences; Secondary Education; Labor Markets; Common Carriers Industry; Food&Beverage Industry; Business Cycles and Stabilization Policies; General Manufacturing; Construction Industry; Pulp&Paper Industry; Textiles; Apparel&Leather Industry; Plastics&Rubber Industry; Rural Labor Markets (search for similar items in EconPapers)
Date: 2021-05-10
New Economics Papers: this item is included in nep-sea
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (6)

Downloads: (external link)
http://documents.worldbank.org/curated/en/85380162 ... veloping-Country.pdf (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:wbk:wbrwps:9653

Access Statistics for this paper

More papers in Policy Research Working Paper Series from The World Bank 1818 H Street, N.W., Washington, DC 20433. Contact information at EDIRC.
Bibliographic data for series maintained by Roula I. Yazigi ().