Automating efficiency: The impact of industrial robots on labor investment in China

This study examines the impact of industrial robot applications on labor investment efficiency. While previous studies have mainly focused on how industrial robots affect productivity, economic structures, and labor markets, their influence on labor investment efficiency has remained relatively underexplored. Using data from Chinese manufacturing firms, our results demonstrate that the adoption of industrial robots significantly improves labor investment efficiency. This improvement is mainly achieved by optimizing the human capital structure and enhancing capital deepening. We also find that this effect is more pronounced in non-state-owned enterprises, in environments with reduced information asymmetry, and in firms with low R&D investment and labor intensity. Overall, our results highlight the positive effect of industrial robot applications on the efficiency of corporate labor investments from a microeconomic perspective, providing important insights for labor investment decisions and resource allocation optimization. •Industrial robot applications in China improve labor investment efficiency.•Optimizing human capital structure and facilitating capital deepening are two key mechanisms.•The effect is more pronounced for non-SOEs and firms with poor information asymmetry.•Lower R&D investment and labor intensity strengthen this effect.