Foreign ownership and robot adoption

Leone, Fabrizio (2022) Foreign ownership and robot adoption. CEP Discussion Papers (CEPDP1854). London School of Economics and Political Science. Centre for Economic Performance, London, UK.

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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. The ability of expanding into foreign markets via the parental network is the key driver of the adoption choice. An empirical model of firm investment reveals that MNEs generate significant industry-level productivity gains but decreases the labor share by boosting robot adoption. However, the first effect is one order of magnitude larger than the second. These results provide new evidence about the efficiency versus equity trade-off that policymakers face when attracting MNEs.

Item Type:	Monograph (Discussion Paper)
Official URL:	https://cep.lse.ac.uk/_new/publications/discussion...
Additional Information:	© 2022 The Author(s)
Divisions:	Management
Subjects:	H Social Sciences > HC Economic History and Conditions
JEL classification:	F - International Economics > F2 - International Factor Movements and International Business > F23 - Multinational Firms; International Business O - Economic Development, Technological Change, and Growth > O3 - Technological Change; Research and Development > O33 - Technological Change: Choices and Consequences; Diffusion Processes
Date Deposited:	13 Jan 2023 13:57
Last Modified:	01 Mar 2024 12:24
URI:	http://eprints.lse.ac.uk/id/eprint/117888

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