Institutions, Holdup and Automation

Arbeitspapier

What drives investment in automation technologies? This paper documents a positive relationship between labor-friendly institutions and investment in in- dustrial robots in a sample of developing and advanced economies. Institutions explain a substantial share of cross-country variation in automation. The relation- ship between institutions and robots is stronger in sunk cost-intensive industries, where producers are vulnerable to holdup. The result suggests that one reason for producers to invest in automation is to thwart rent appropriation by labor. As a consequence, policies aimed at supporting workers' welfare by increasing their bargaining power might actually reduce their employment opportunities.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: GLO Discussion Paper ; No. 941

Classification and Topics

• Classification: Wirtschaft ; Management of Technological Innovation and R&D ; Technological Change: Choices and Consequences; Diffusion Processes ; Industrial Organization and Macroeconomics: Industrial Structure and Structural Change; Industrial Price Indices ; Labor-Management Relations, Trade Unions, and Collective Bargaining: General ; Comparative Studies of Countries
• Subject: automation ; robots ; holdup ; institutions ; unions ; sunk costs ; appropriability ; bargaining ; frictions ; rents ; technology adoption

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Presidente, Giorgio
• Event: Veröffentlichung
• (who): Global Labor Organization (GLO)
• (where): Essen
• (when): 2021

Further information

• Handle: http://hdl.handle.net/10419/242821
• Last update: 10.03.2025, 11:44 AM CET