Do Industrial Robots Mitigate Supply Chain Risks? Evidence from Firm-Level Text Analysis

Building a resilient and efficient supply chain system is critical for sustaining firm operations in an increasingly uncertain global environment. This study examines whether the firm-level exposure to industry-wide robot penetration mitigates firm-level supply chain risks. By adopting Bartik’s instrumental variable approach to decompose industry-level robot data to the firm level (from the International Federation of Robotics, IFR), and using a novel text-mining-based supply chain risk index, constructed via a tailored “supply chain risk” dictionary, to quantify sentences containing both keywords from firms’ annual report MD&A sections, we apply a fixed effects model, and find that robot adoption significantly reduces supply chain risk by enhancing firms’ discourse power and improving supply chain coordination. The effect is more pronounced in firms with higher capital intensity, greater international exposure, stronger regulatory oversight, and better ESG (Environmental, Social, and Governance) performance. By integrating automation adoption with supply chain risk management, this study extends the literature on production economics and supply chain resilience. Our findings reveal that industrial robots, beyond enhancing productivity, function as a risk-mitigating technology that strengthens supply chain stability and operational continuity in volatile global production networks.