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The rise of robots and the fall of cost stickiness: Evidence from Chinese manufacturers
Author(s) -
Jia Wanjiao,
Yang Ting,
Zhang Xin
Publication year - 2023
Publication title -
accounting and finance
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.645
H-Index - 49
eISSN - 1467-629X
pISSN - 0810-5391
DOI - 10.1111/acfi.13022
Subject(s) - robot , china , sample (material) , economics , labour economics , industrial organization , business , microeconomics , computer science , artificial intelligence , law , chemistry , chromatography , political science
Industrial robots are increasingly used to perform tasks traditionally assigned to humans. Using a sample of Chinese manufacturers, we examine the impact of robot adoption on firm cost stickiness. We find that robot adoption is associated with less sticky costs. The negative impact of robot adoption on cost stickiness is particularly meaningful for state‐owned enterprises and firms with higher labour costs, and becomes significantly stronger after the enactment of China's Labour Contract Law, which significantly increases labour adjustment costs. These findings are consistent with the conjecture that the adoption of robots allows firms to reduce their overall labour adjustment costs.