Automation and Productivity: Evidence from Thai Manufacturing Firms

Rapid advances in the automation technology have led to a rise of public interest among researchers and policy makers. In manufacturing, most papers proved that industrial robots and automation is a key enabler to improve firm’s competitiveness and the overall growth of country. However, the often referred to picture of this new technology as “job killers” caused by the decoupling of wages and output per worker. Using Thai manufacturing firm-level data, this paper provides empirical evidence that there is a positive relationship between firms adopting automated process and their TFP. However, being in EEC area shows mixed results. We also find that automation investment has positive significant effect on total employment. Furthermore, there is some evidence that automation is driving an increase in demand for skilled workers and has reduced unskilled activities.