Shadow of Technology: Robotics Development and Regional Economic Inequality

Since robots came into the world, robotics innovation have steadily increased in China. Nevertheless, whether the development of robotics can aggravate regional economic inequality still requires further analysis. The purpose of this paper is to clarify whether this side effect exists. This paper makes estimations based on city and district/county levels combining the regional economic data and robot patent data. At the city level, we calculate various indicators of city-level regional inequality (such as Gini coefficient and the Theil entropy index) for 282 Chinese cities. At the district/county level, we construct multiple equations to explore the economic roots of above rising inequality. There are many findings. Overall regional inequality is higher in cities with a high degree of robotics development, which is mainly due to agglomeration effects and differentiation effects of robotics. Agglomeration effects are that robotics can boost regional consumption, investment, income, and public services, which constitutes the engine of district/county economic growth. However, the unbalanced innovations of robotics in the urban and rural areas, the economically developed and undeveloped areas, and the population inflow and outflow areas further widen regional development disparities, as strengthened differentiation effects constitute some of the main causes of rising regional inequality. To the best of the author's knowledge, this paper is the first to analyze the impact of robotics on the regional economic inequality. This empirical study will enrich the existing theoretical perspectives on regional development in the age of artificial intelligence. The results indicate that despite acknowledging the economic growth effect of robotics, it is necessary to pay attention to its exacerbation of regional economic imbalances.