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

Bettiol, Marco, Capestro, Mauro, Di Maria, Eleonora and Ganau, Roberto (2024) Is this time different?: how Industry 4.0 affects firms' labor productivity. Small Business Economics, 62 (4). pp. 1449-1467. ISSN 0921-898X

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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.

Item Type:	Article
Additional Information:	© 2023 The Author(s)
Divisions:	Geography & Environment
Subjects:	H Social Sciences > HD Industries. Land use. Labor T Technology H Social Sciences > HB Economic Theory
JEL classification:	J - Labor and Demographic Economics > J2 - Time Allocation, Work Behavior, and Employment Determination and Creation; Human Capital; Retirement > J24 - Human Capital; Skills; Occupational Choice; Labor Productivity L - Industrial Organization > L2 - Firm Objectives, Organization, and Behavior > L23 - Organization of Production L - Industrial Organization > L2 - Firm Objectives, Organization, and Behavior > L25 - Firm Performance: Size, Diversification and Scope, Age, Profit, and Sales O - Economic Development, Technological Change, and Growth > O3 - Technological Change; Research and Development > O32 - Management of Technological Innovation and R&D
Date Deposited:	14 Aug 2024 18:09
Last Modified:	12 Dec 2024 04:25
URI:	http://eprints.lse.ac.uk/id/eprint/124545

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