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The rise of robots and the fall of cost stickiness: Evidence from Chinese manufacturers

Year: 2022

Type: article

Abstract: 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.

Source: Accounting and Finance

DOI: 10.1111/acfi.13022

Authors: Wanjiao Jia, Ting Yang, Xin Zhang

Institutions: Shanghai University, Auckland University of Technology, Fudan University

Language: English

Topic: Auditing, Earnings Management, Governance

Subfield: Accounting

Field: Business, Management and Accounting

Domain: Social Sciences

SDGs: Decent work and economic growth, Industry, innovation and infrastructure

Open Access status: hybrid

Estimated APC paid: $3,050