<p>This study examines how the rise of industrial robots affects trade and production networks in East Asia. Declining robot costs have led to increased adoption across countries, particularly in those with high labor costs or where production is capital-intensive. This includes not only developed economies but also several emerging ones experiencing rising labor costs. A Ricardian-based gravity model reveals convergence in absolute advantage: developing countries have upgraded their industrial technologies, thereby narrowing the technological gap with advanced economies. In contrast, under comparative advantage, developing countries are losing traditional labor cost advantages. The study suggests that robotization has become a strategic response to rising costs. Despite the growth of automation, there is limited evidence of reshoring. Trade in both final goods and intermediate inputs has continued to expand. Among the contributing factors are the modest share of robot costs in total industrial production and the increasing adoption of robotics in developing countries. These findings suggest that East Asian production networks remain resilient and that automation is transforming, rather than dismantling, regional value chains.</p>

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Robots, trade and production networks: the role of robots in shaping trade competitiveness in East Asia

  • Kuson Leawsakul

摘要

This study examines how the rise of industrial robots affects trade and production networks in East Asia. Declining robot costs have led to increased adoption across countries, particularly in those with high labor costs or where production is capital-intensive. This includes not only developed economies but also several emerging ones experiencing rising labor costs. A Ricardian-based gravity model reveals convergence in absolute advantage: developing countries have upgraded their industrial technologies, thereby narrowing the technological gap with advanced economies. In contrast, under comparative advantage, developing countries are losing traditional labor cost advantages. The study suggests that robotization has become a strategic response to rising costs. Despite the growth of automation, there is limited evidence of reshoring. Trade in both final goods and intermediate inputs has continued to expand. Among the contributing factors are the modest share of robot costs in total industrial production and the increasing adoption of robotics in developing countries. These findings suggest that East Asian production networks remain resilient and that automation is transforming, rather than dismantling, regional value chains.