The application of industrial robots, capital distortion, and firm productivity: empirical evidence from China

The impact of industrial robots on firm-level total factor productivity (TFP) is explored in the Chinese context, and empirical examinations, utilizing data from industrial robots and Chinese listed companies from 2006 to 2019, are conducted to test the relationship between industrial robots and firm-level TFP. The results show that the application of industrial robots has a positive effect on firm-level TFP, and capital distortion negatively moderates the effect of industrial robots on firm-level TFP. The underlying mechanisms of industrial robots and TFP through the three channels, including the persistent innovation, learning by doing, and market expansion. Besides, the application of industrial robots significantly promotes TFP when firms face low government subsidies, low financial misallocation, and high R&D investment. The findings carry significant policy implications by providing novel evidence and fresh insights into the effect of the application of industrial robots on firm-level TFP in the context of emerging economies.