Robots and offshoring

Abstract

We examine the impact of increased robotization in manufacturing on offshoring, defined as the share of imported intermediate inputs. We construct a panel dataset of 71 countries and seven manufacturing sectors for the period 1993-2015 using data on robot stocks and on intermediate goods’ trade. We find that sectors that experienced increased robot densification, experienced slower offshoring growth. Interestingly, the effect is stronger for trade within developed countries and most of the effect took place before the global financial crisis, so we do not find evidence that robotization is responsible for the post-crisis sluggish growth in offshoring. Importantly, results are not driven by the auto industry.