Robots, Labour Market Frictions and Corporate Financial Policy

Document Type

Article

Publication Date

1-1-2024

Abstract

We construct a novel firm-level measure of robot exposure using the International Federation of Robotics (IFR) data set and new robot patent data. We find that the use of robots leads to higher leverage and lower cash holdings. Using an instrumental variable based on the comparative advantage of robots in specific tasks, we find that the effect is likely to be causal and driven by the reduced operating leverage. The effect is stronger when firms are hit by negative shocks including minimum wage hikes and foreign competition. Firms with more robots pay out more and use fewer corporate hedging contracts.

Identifier

85209893172 (Scopus)

Publication Title

European Financial Management

External Full Text Location

https://doi.org/10.1111/eufm.12534

e-ISSN

1468036X

ISSN

13547798

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