Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/242821
Authors: 
Presidente, Giorgio
Year of Publication: 
2021
Series/Report no.: 
GLO Discussion Paper No. 941
Publisher: 
Global Labor Organization (GLO), Essen
Abstract: 
What drives investment in automation technologies? This paper documents a positive relationship between labor-friendly institutions and investment in in- dustrial robots in a sample of developing and advanced economies. Institutions explain a substantial share of cross-country variation in automation. The relation- ship between institutions and robots is stronger in sunk cost-intensive industries, where producers are vulnerable to holdup. The result suggests that one reason for producers to invest in automation is to thwart rent appropriation by labor. As a consequence, policies aimed at supporting workers' welfare by increasing their bargaining power might actually reduce their employment opportunities.
Subjects: 
automation
robots
holdup
institutions
unions
sunk costs
appropriability
bargaining
frictions
rents
technology adoption
JEL: 
O32
O33
L16
J50
O57
Document Type: 
Working Paper

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