Robot, trade and employment: Unravelling the relationship within the European context

Abstract

The paper deals with the effects that robot adoption in a country may generate in other trade-related countries. We concentrate on the Top 5 European economies as robot adopters over the period from 1995 to 2018 (Italy, Germany, France, Spain, UK) by testing whether robot adoption affects employment dynamics also beyond borders. To reach this goal we develop a composite indicator that captures both the penetration of industrial robots within these economies and the export reliance of other European nations on them. Our findings show a positive association between Top 5 robot adoption and several measures of employment outcomes in other European countries even though this result is mainly driven by low income countries. We thus infer empirically the prevalence of a productivity effect as opposed to a reshoring effect within the highly integrated European market.