Robot adoption and export performance: evidence from Chinese industrial firms

Abstract

Purpose As a new research interest, robots have surpassed human performance across several aspects. In this research, the authors wish to investigate whether robot adopters perform better than non-adopters in terms of export behavior, especially when distinguishing between different types of firms. Design/methodology/approach The authors try a new strategy to identify the extent of robot adoption by import data and compare the export trajectories of robot adopters and non-adopters by employing the propensity score matching-difference in difference (PSM-DID) method. Findings The authors find that robot adopters are more likely to enter export markets and improve subsequent export performance, as the gains from doing so can spread the reduction in variable production costs to a larger customer base abroad. But this rule does not always seem to work; for large-scale firms, robot adoption makes it easier to win export competition and increase market share, while small and medium-sized enterprises (SMEs) do not seem to enjoy any benefits from adoption. More importantly, robot adoption also leads to the fiercer market competition when improving the productivity of firms, which will threaten smaller non-adopters. Originality/value The findings provide new evidence for the scale bias of robotics and offer new insights into whether exporters or future exporters ought to adopt robots in production. Highlights First, distinguishing from existing research, we explain the controversial results of previous work on robotics by providing evidence from export markets and using the concept of size bias, which helps to update the theoretical interpretation of robotics and provides new insights for current and future exporters to evaluate their robot adoption decisions. Second, we extend previous research by further considering the potential robotics threats faced by non-adopters, especially we record that export gains of robot adopters are partially at the expense of smaller non-adopters, which provides new evidence for the rationale of SME protection policies and supplements robotics theory with new knowledge, such as the competitive game of firms related to robot adoption. Third, to our knowledge, prior research tended to examine the economic effects of robotics through industry data provided by the IFR, this may lead to systematic bias due to the inability to distinguish the robot adoption intentions of different firms. In this respect, we try a new strategy through robot import data and further distinguish between robot adopters and non-adopters in the sample, which helps to mitigate the potential bias in the findings and provide a complement to the recently developed literature related to robotics. Finally, as we pointed out earlier, robot adoption could be an interesting research work for the Chinese export market, which helps us to obtain some special findings, such as in assessing whether the benefits of robots are equally appropriate for economies that previously had an advantage in terms of labor.

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