Have Robots Grounded the Flying Geese? Evidence from Greenfield FDI in Manufacturing
For decades, manufacturers around the world have outsourced production to countries with lower labor costs. However, there is a concern that robotization in high-income countries will challenge this shifting international division of labor known as...
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| Online Access: | http://documents.worldbank.org/curated/en/945231577418925587/Have-Robots-Grounded-the-Flying-Geese-Evidence-from-Greenfield-FDI-in-Manufacturing http://hdl.handle.net/10986/33105 |
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okr-10986-331052022-09-20T00:13:04Z Have Robots Grounded the Flying Geese? Evidence from Greenfield FDI in Manufacturing Hallward-Driemeier, Mary Nayyar, Gaurav AUTOMATION ROBOTS FOREIGN DIRECT INVESTMENT GLOBAL VALUE CHAIN FLYING GEESE PARADIGM For decades, manufacturers around the world have outsourced production to countries with lower labor costs. However, there is a concern that robotization in high-income countries will challenge this shifting international division of labor known as the "flying geese" paradigm. Greenfield foreign direct investment decisions constitute a forward-looking indicator of where production is expected, rather than trade flows that reflect past investment decisions. Exploiting differences across countries and industries, the intensity of robot use in high-income countries has a positive impact on foreign direct investment growth from high-income countries to low- and middle-income countries over 2004-15. Past a threshold, however, increased robotization in high-income countries has a negative impact on foreign direct investment growth. Only 3 percent of the sample exceeds the threshold level beyond which further automation results in negative foreign direct investment growth and is consistent with re-shoring. For another 25 percent of the sample, the impact of robotization on the growth of foreign direct investment is positive, but at a rate that is declining. So, although these are early warning signs, automation in high-income countries has resulted in growing foreign direct investment for more than two-thirds of the sample under consideration. Some geese may be slowing, but for now, most continue to fly. 2019-12-27T16:42:10Z 2019-12-27T16:42:10Z 2019-12 Working Paper http://documents.worldbank.org/curated/en/945231577418925587/Have-Robots-Grounded-the-Flying-Geese-Evidence-from-Greenfield-FDI-in-Manufacturing http://hdl.handle.net/10986/33105 English Policy Research Working Paper;No. 9097 CC BY 3.0 IGO http://creativecommons.org/licenses/by/3.0/igo World Bank World Bank, Washington, DC Publications & Research Publications & Research :: Policy Research Working Paper |
| repository_type |
Digital Repository |
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Foreign Institution |
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Digital Repositories |
| building |
World Bank Open Knowledge Repository |
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World Bank |
| language |
English |
| topic |
AUTOMATION ROBOTS FOREIGN DIRECT INVESTMENT GLOBAL VALUE CHAIN FLYING GEESE PARADIGM |
| spellingShingle |
AUTOMATION ROBOTS FOREIGN DIRECT INVESTMENT GLOBAL VALUE CHAIN FLYING GEESE PARADIGM Hallward-Driemeier, Mary Nayyar, Gaurav Have Robots Grounded the Flying Geese? Evidence from Greenfield FDI in Manufacturing |
| relation |
Policy Research Working Paper;No. 9097 |
| description |
For decades, manufacturers around the
world have outsourced production to countries with lower
labor costs. However, there is a concern that robotization
in high-income countries will challenge this shifting
international division of labor known as the "flying
geese" paradigm. Greenfield foreign direct investment
decisions constitute a forward-looking indicator of where
production is expected, rather than trade flows that reflect
past investment decisions. Exploiting differences across
countries and industries, the intensity of robot use in
high-income countries has a positive impact on foreign
direct investment growth from high-income countries to low-
and middle-income countries over 2004-15. Past a threshold,
however, increased robotization in high-income countries has
a negative impact on foreign direct investment growth. Only
3 percent of the sample exceeds the threshold level beyond
which further automation results in negative foreign direct
investment growth and is consistent with re-shoring. For
another 25 percent of the sample, the impact of robotization
on the growth of foreign direct investment is positive, but
at a rate that is declining. So, although these are early
warning signs, automation in high-income countries has
resulted in growing foreign direct investment for more than
two-thirds of the sample under consideration. Some geese
may be slowing, but for now, most continue to fly. |
| format |
Working Paper |
| author |
Hallward-Driemeier, Mary Nayyar, Gaurav |
| author_facet |
Hallward-Driemeier, Mary Nayyar, Gaurav |
| author_sort |
Hallward-Driemeier, Mary |
| title |
Have Robots Grounded the Flying Geese? Evidence from Greenfield FDI in Manufacturing |
| title_short |
Have Robots Grounded the Flying Geese? Evidence from Greenfield FDI in Manufacturing |
| title_full |
Have Robots Grounded the Flying Geese? Evidence from Greenfield FDI in Manufacturing |
| title_fullStr |
Have Robots Grounded the Flying Geese? Evidence from Greenfield FDI in Manufacturing |
| title_full_unstemmed |
Have Robots Grounded the Flying Geese? Evidence from Greenfield FDI in Manufacturing |
| title_sort |
have robots grounded the flying geese? evidence from greenfield fdi in manufacturing |
| publisher |
World Bank, Washington, DC |
| publishDate |
2019 |
| url |
http://documents.worldbank.org/curated/en/945231577418925587/Have-Robots-Grounded-the-Flying-Geese-Evidence-from-Greenfield-FDI-in-Manufacturing http://hdl.handle.net/10986/33105 |
| _version_ |
1764478011630944256 |