Have robots grounded the flying geese? evidence from greenfield FDI in manufacturing Mary Hallward-Driemeier, Gaurav Nayyar.
For decades, manufacturers around the world have outsourced production to countries with lower labor costs. However, there is a concern that robotization in high-income countries will challenge this shifting international division of labor known as the "flying geese" paradigm. Greenfield f...
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| Online Access: |
Full Text (via Open Knowledge Repository) |
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| Main Authors: | , |
| Format: | Electronic eBook |
| Language: | English |
| Published: |
[Washington, DC, USA]
World Bank Group, Finance, Competitiveness and Innovation Global Practice
December 2019
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| Series: | Policy research working paper
9097. |
| Summary: | For decades, manufacturers around the world have outsourced production to countries with lower labor costs. However, there is a concern that robotization in high-income countries will challenge this shifting international division of labor known as the "flying geese" paradigm. Greenfield foreign direct investment decisions constitute a forward-looking indicator of where production is expected, rather than trade flows that reflect past investment decisions. Exploiting differences across countries and industries, the intensity of robot use in high-income countries has a positive impact on foreign direct investment growth from high-income countries to low- and middle-income countries over 2004-15. Past a threshold, however, increased robotization in high-income countries has a negative impact on foreign direct investment growth. Only 3 percent of the sample exceeds the threshold level beyond which further automation results in negative foreign direct investment growth and is consistent with re-shoring. For another 25 percent of the sample, the impact of robotization on the growth of foreign direct investment is positive, but at a rate that is declining. So, although these are early warning signs, automation in high-income countries has resulted in growing foreign direct investment for more than two-thirds of the sample under consideration. Some geese may be slowing, but for now, most continue to fly. |
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| Physical Description: | 1 Online-Ressource (circa 25 Seiten) Illustrationen. |