TMCD researchers publish two papers on the developmental impact of the Fourth Industrial Revolution (4IR)

Recently, researchers from TMCD publish two articles exploring the distributional and labour market outcome of the 4IR. The paper co-authored by Professor Xiaolan Fu, “Diffusion of Industrial Robots and Inclusive Growth: Labour Market Evidence from Cross-Country Data”, investigates the impact of industrial robot adoption on inclusive growth based on labour market evidence from a cross-country panel dataset of 74 economies between 2004 and 2016. It finds that the adoption of industrial robots is associated with significant gains in labour productivity and total employment in developed economies, while such effects are insignificant in developing countries. Overall, in both developed and developing economies, increased robot adoption is linked with significantly higher income inequality, although no evidence of technological unemployment. Females are found to benefit in terms of employment from the adoption of industrial robots in developed economies, while in developing countries higher levels of education matters more. The digital version of the article is now available in Journal of Business Research. View here.

The other paper, “The Fourth Industrial Revolution, Technology Innovation and Firm Wages: Empirical Evidence from OECD Economies”, is co-authored by ODID’s DPhil student Liu Shi, TMCD Research Officer Dr. Shaomeng Li and Professor Xiaolan Fu. The study uses a unique firm-level dataset that distinguishes different types of 4IR technologies. It finds that 4IR technological innovations raise firm wage levels on average, and this wage-boosting effect is stronger than that generated by non-4IR innovations. It is also found that the wage-boosting effect only appears amongst innovative firms in high technology sectors or firms innovating in core technologies, which partly hints potential consequences of wage inequality brought about by the 4IR. The article will be published in issue 169 of the Revue d'économie industrielle (Review of Industrial Economics), and the relevant information can be found here.