Working Paper
Robots and Export Quality

Published
2021-05
Metadata
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.Citation
“DeStefano, Timothy; Timmis, Jonathan. 2021. Robots and Export Quality. Policy Research Working Paper;No. 9678. World Bank, Washington, DC. © World Bank. https://openknowledge.worldbank.org/handle/10986/35639 License: CC BY 3.0 IGO.”
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