Automation, trade and multinational activity: Micro evidence from Spain

We use a rich dataset of Spanish manufacturing firms from 1990 to 2016 to shed light on how automation in a high-income country affects trade and multinational activity involving lower-income countries. We exploit variation in firm exposure to robotics inventions over time, as measured using ex ante task specialization and the tasks described in new robotics patents. We show that the deployment of robots in Spanish firms had a positive impact on their offshoring to lower-income countries. For firms that had not yet offshored production to lower-income countries, robot adoption caused them to start newly doing so. By contrast, for firms that were already offshoring to lower-income countries, robot adoption had no effect on their offshoring. • The deployment of robots in Spanish firms had a positive impact on offshoring to developing countries. • Firms that adopted robots started newly offshoring production. • Firms that were already offshoring saw no effect on their offshoring. • Robot adoption had no impact on offshoring to advanced economies.