Firms That Automate: Theory & Evidence

Abstract

Which firms are using automation technologies, and what are the effects on firms and the aggregate economy? Using Italian survey data on adoption of cutting-edge technologies, such as Artificial Intelligence, I compile a set of novel findings. Firms that automate are larger, pay higher wages, and are more productive. Technology adopters grow faster once they start using automation technologies. I embed technology adoption in a heterogeneous firm model to investigate the aggregate implications of automation. The model reconciles the firm-level evidence of technology adoption boosting firm size, with the various macro studies suggesting a negative overall effect on employment.

Joel Kariel

Econometrics Adviser

My research interests include firm dynamics, productivity, technological change, market power, applied econometrics.