Industrial Robot,Superstar Firms and Labor Income Share Changes:Coexistence of"Boon"and"Worry"
As one of the core technologies of the ongoing technological revolution,industrial robots have the potential to impact income distribution among production factors.Superstar firms,with their combined advantages in funding and scale,are at the forefront of adopting industrial robots,playing a significant role in this process.This paper,centered on superstar firms,examines the impact of industrial robot applications on labor income share and the underlying mechanisms.It holds significant implications for China in formulating more reasonable policies regarding factor income distribution.Drawing inspiration from existing literature,this paper constructs a theoretical framework to elucidate the underlying mechanisms through which industrial robot applications contribute to the formation of"superstar effects"and ultimately lead to a decline in labor income share within firms.It thereby contributes to existing research on how new technologies drive the"superstar effect".Using data from Chinese industrial firms between 2000 and 2015,this paper employs double fixed-effect and difference-in-differences models to empirically validate the theoretical analysis,providing theoretical and practical support for formulating more equitable income distribution policies in China.The findings reveal that industrial robot applications generally have a"boon"on labor income share,with significant heterogeneity across firms,regions,and industries.However,from the perspective of superstar firms,the application of industrial robots can exacerbate the"superstar effect",posing a"worry"about a stronger downward trend in labor income share.An analysis of the logic behind the"worry"shows that superstar firms mainly influence the labor income share through the"competitive effect"and"demonstration effect".The former,driven by superstar firms'adoption of industrial robots,is the primary cause,while the latter is an emerging factor.Testing the Anti-Monopoly Law of the People's Republic of China as a quasi-natural experiment,the paper finds that it is insufficient to mitigate the hidden concern at present.Based on these conclusions,this paper proposes the following policy recommendations.Firstly,China should promote the adoption of industrial robots in firms,addressing the relatively low labor income share in the initial distribution of resources.Secondly,the government should use tax policies to redistribute income between firms that have not adopted robots,preventing a few firms adopting industrial robots from exerting excessive market power and worsening factor distribution.Thirdly,by offering subsidies and tax incentives,the government should encourage eligible medium-sized firms to adopt robots in production,enhancing their competitiveness against superstar firms and mitigating the potential downward trend in labor income share due to the"superstar effect".
industrial robot applicationslabor income sharesuperstar firmscompetition effectdemonstration effect
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