The Impact Of Adopting Industrial Robots On Indian Automobile Manufacturing Enterprises

Industrial robots were first adopted in developed countries.In India,after foreign-funded enterprises adopted industrial robots,productivity and market share have been improved,which also drove the domestic Indian automobile enterprises to adopt and develop industrial robots,and promoted the penetration of industrial robots in India’s automobile manufacturing industry.However,the adoption of industrial robots in India has certain particularities.The increased labor cost in developed countries has led to the adoption of industrial robots.However,the labor cost in India is relatively low.Is it still a good choice for enterprises to adopt industrial robots to replace manual labor?From the perspective of developed countries,industrial robots have a substitution effect on labor.Therefore,would the adoption of industrial robots in India’s automobile manufacturing industry also reduce employment,thus contradicting the goal of promoting employment in the "Make in India" policy? Therefore,this thesis mainly focuses on exploring the impact of the adoption of industrial robots on enterprise employment in India’s automobile manufacturing industry.This thesis uses the annual survey data of India’s automobile manufacturing industry(a total of 7,311 observations)and employs instrumental variable methods for empirical research.The research found that: firstly,the adoption of industrial robots significantly increases enterprise employment,which is consistent with the Indian government’s goal of expanding employment in the manufacturing industry.Secondly,this thesis proves that the adoption of industrial robots not only expands enterprise employment,but also generates other positive effects,such as increasing sales revenue,improving total factor productivity,and allowing enterprises to sustain higher quality development.Based on the baseline regression,this thesis conducted robustness tests,including adding the degree of capital deepening in the industry as an additional control variable,replacing explanatory variables and instrumental variables.In addition,this thesis conducted heterogeneity studies,and the results showed that the positive impact of adopting industrial robots is more significant for foreign-funded firms,joint ventures,and larger-scale enterprises.Further mechanism analysis shows that the employment-creating effect of industrial robots is greater than the employment substitution effect.Firstly,in terms of enterprise employment,the adoption of industrial robots increased the demand for labor from enterprises.Secondly,in terms of the industry,the adoption of industrial robots increased the number of enterprises in the industry,and thus increased the demand for labor in the automobile manufacturing industry.