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Robots and Export Quality (English)

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.

Details

  • Author

    DeStefano,Timothy, Timmis,Jonathan David

  • Document Date

    2021/05/27

  • Document Type

    Policy Research Working Paper

  • Report Number

    WPS9678

  • Volume No

    1

  • Total Volume(s)

    1

  • Country

    World,

  • Region

    The World Region,

  • Disclosure Date

    2021/05/27

  • Disclosure Status

    Disclosed

  • Doc Name

    Robots and Export Quality

  • Keywords

    determinants of economic growth; computer aided design; input-output table; high level of accuracy; export quality; lower quality goods; global value chain; country income group; proxy for quality; measure of use; product quality improvement; quality of exports; elasticity of substitution; import trade data; high quality goods; quantity of exports; less developed country; exchange rate devaluation; effect of trade; impact of technology; diffusion of technology; future of work; production and export; more advanced countries; high income economy; international supply chain; effects of technology; low labor productivity; sample period; fixed effect; home country; home countries; instrumental variable; unit price; new product; export product; first stage; trade literature; emerging economy; Emerging economies; import data; real value; industrial robot; advanced economy; world regions; first year; regional shock; export variety; standard error; predictive power; trade datum; product type; production process; export flow; quality growth; intermediate input; trade value; descriptive statistic; quality measure; knowledge spillover; input use; manufacturing industry; time t; transport cost; destination country; foreign supplier; automotive industry; trade network; manufacturing sector; imported intermediate; price index; future value; weighted average; complementary asset; product variety; constant price; bottom quartile; foreign export; quality of interaction; technology adoption; collected information; new practice; trade service; backward linkages; manufacturing export; broad consensus; trade partner; future research; alternative measure; application data; negative relationship; Technology Diffusion; technology spillover; alternative instruments; performance outcome; market power; production quality; lagged value; quality certification; organizational capital; early adopter; relative ranking; subsequent years; industrial employment; value added; firm level; exporting country; wages rise; low-wage economies; Capital Investments; several decades; sector classification; explanatory power; import product; food product; food industry; statistical significance; product level; adjustment cost; human labor; automobile production; defective product; regression analysis; scale effect; productivity growth; finished product; metal product; electronic component; open access; development policy; expected return; Research Support; complementary investment; production method; foreign multinational; global production; overseas supplier; production line; new technology; production standards; foreign trade; International Trade; high wage; manufacturing production; management skill; complementary factor; product defect

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Citation

DeStefano,Timothy Timmis,Jonathan David

Robots and Export Quality (English). Policy Research working paper,no. WPS 9678 Washington, D.C. : World Bank Group. http://documents.worldbank.org/curated/en/915351622137193881/Robots-and-Export-Quality