Robotization, Multinational Production and Country Welfare

ABSTRACT This paper studies how robotization affects multinational production (MP), trade and country welfare. While robot adoption reduces production costs and enhances efficiency, its effect on global production structures and welfare distribution remains unclear. Using cross‐country data, we show that robot adoption is positively correlated with both inward and outward MP, and that more robotized countries are more likely to engage in reshoring, where domestic production expands faster than outward MP. We develop a multi‐country, multi‐sector general equilibrium model incorporating trade, MP and labour–robot substitution to interpret these patterns. Through three counterfactual simulations, we show (i) global robotization improves world welfare but generates highly unequal gains; (ii) targeting robotization to mid‐level robot adopters yields more balanced global outcomes than concentrating it in advanced economies; and (iii) MP frictions significantly shape how robotization spreads its benefits across borders. Our contribution lies in linking robotization to the structure of MP and trade and in quantifying how the distribution of robotization across countries and the openness of production networks determine global welfare.