Publication: Robots and Export Quality
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Published
2021-05
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Date
2021-06-02
Author(s)
DeStefano, Timothy
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Abstract
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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“DeStefano, Timothy; Timmis, Jonathan. 2021. Robots and Export Quality. Policy Research Working Paper;No. 9678. © World Bank. http://hdl.handle.net/10986/35639 License: CC BY 3.0 IGO.”
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