Robots and firm total factor productivity: evidence from China

Utilising data of robot application in prefecture-level and Chinese listed firms from 2003 to 2017, this research investigates the impact of industrial robots on the firm total factor productivity (TFP). Empirical results show that the application of industrial robots can boost the growth of firm TFP. The conclusion holds after multiple robustness tests taking into account the effects of the industry, different estimation methods, and instrumental variables. Moreover, the results indicate that the effects of industrial robots enhance firm TFP is particularly evident for non-state-owned enterprises, capital-intensive industries, firms with less financial constraints, and those located in eastern regions. Mechanism analysis shows that industrial robots improve firm TFP by boosting innovation vitality and operation efficiency. These findings help deepen the understanding of how industrial robots shape the TFP at the firm level, and provide policy implications for promoting technology and economic development.