Tallinn University of Technology

You are welcome to the Department of Economics and Finance research seminar "Automation in an Open, Catching-Up Economy: Aggregate and Microeconometric Evidence". The seminar will take place on 8 veebruaril kell 16:00 - 17:00 ruumis SOC-413 ja MS Teamsi veebikeskkonnas  (link).

Presenter: Amaresh K Tiwari (University of Tartu)

Using the universe of firms in Estonia, we study the implications of automation, which is mainly imports-led, for productivity and factor shares of tasks and value-added. First, the market share and the share in the aggregate total factor productivity (TFP) of the automation adopting firms, which constitute a small fraction of the total, are large and have grown over the years. Second, in contrast to the findings for the developed economies, aggregate labor share of value-added for the adopting firms is higher than that for the non-adopters, and has grown, among others, through reallocation of economic activities towards the adopting firms. Third, concurrently, average (unweighted and weighted) TFP of the adopters grew faster than that of the non-adopters. Fourth, at the micro-level, labor share of tasks has over the years declined among the adopting firms and is lowest in firms that automate frequently, where the frequency of automation conveys arich set of information regarding the adopters and their automation characteristics. Fifth, productivity impact of automation is heterogeneous: (a) firms automating regularly are more productive than those that automate occasionally and (b) firms that realize complementarities between automation and innovative management practices are more productive than those that only automate. The latter establishes that the innovative management practises adopted by the adopters are those that help discover and facilitate complementarities between automation and human labor.

Keywords: Import-Led automation, Foreign Direct Investment (FDI), Productivity, Labor Share, Factor Task Content of Production, Complementarities

The public research seminars of the Department of Economics and Finance (DEF) at Tallinn University of Technology  usually take place on the second and fourth Wednesdays of the month in both onsite and online format, unless announced otherwise. The presentation will last approximately 45 minutes followed by 15 minutes of discussion. The seminars are held in English. Copies of the paper are usually made available at the seminar. The DEF seminar series is organised in collaboration with the project ”Individual Behaviour and Economic  Performance: Methodological  Challenges and Institutional Context” (IBEP), which has received funding from the European Union’s Horizon 2020 Research and Innovation programme under Grant Agreement No 952574. Questions about the seminar can be sent to the IBEP seminar coordinator Kadri Männasoo, kadri.mannasoo@taltech.ee.

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