The Impact of Robot Adoption on Global Sourcing

Abstract

This paper studies the impact of robot adoption on firms’ global sourcing activities. Using a rich panel dataset of Spanish manufacturing firms, we investigate how outsourcing and vertically integrated firms changed their sourcing strategies in response to robot adoption. We find that robots increased intermediate input purchases from foreign suppliers while did not affect intermediate input purchases from domestic suppliers between 2006 and 2016. We present a theoretical framework in which the assumptions and predictions are in line with our findings in the dataset. In contrast to rising concerns over reshoring, our findings suggest that robots have yet promoted trade in intermediate inputs.