Robots and Export Quality
Robots are rapidly becoming a key part of manufacturing in developed and emerging economies. This paper examines a new channel for how automation can affect international trade: quality upgrading. Automation can reduce production errors, particular...
| Main Authors: | , |
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| Format: | Working Paper |
| Language: | English |
| Published: |
World Bank, Washington, DC
2021
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| Subjects: | |
| Online Access: | http://documents.worldbank.org/curated/en/915351622137193881/Robots-and-Export-Quality http://hdl.handle.net/10986/35639 |
| Summary: | Robots are rapidly becoming a key part
of manufacturing in developed and emerging economies. This
paper examines a new channel for how automation can affect
international trade: quality upgrading. Automation can
reduce production errors, particularly of repetitive
processes, leading to higher quality products. The effects
of robot use on export quality are estimated, by combining
cross-country and cross-industry data on industrial robots
with detailed Harmonized System 10-digit trade data. Robot
diffusion in (preexisting) foreign customers is used as an
instrumental variable to predict robot adoption in the home
country-industry. The findings show that robot diffusion
leads to increases in the quality of exported products.
Quality improvements are predominantly driven by the
upgrading of developing country exports; and within
countries, quality improvements are driven by upgrading of
(initially) lower-quality exports of developed and
developing countries. The paper also finds some differences
in the type of robots—sophisticated or more basic—associated
with quality gains in developing and developed economies. |
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