Higher education expansion and robot imports: evidence from China

We investigate the impact of higher education expansion policy (HEEP) on robot imports in a developing open economy such as China. First, we treat the HEEP as a quasi-natural experiment and adopt a difference-in-differences strategy to undertake detailed empirical analysis after conducting the common trends tests. Second, we find that the HEEP significantly increases robot imports of firms by both extensive and intensive margins; the impact is mainly concentrated in industries with medium human capital intensity. Specifically, firms in the low (high) human capital intensity sector tend to increase (decrease) robot imports. Third, we explore the underlying mechanism and conduct a series of empirical tests to check robustness; these include adopting a non-linear relationship with the quadratic form, using alternative measures of human capital intensity, excluding observations after 2007, excluding possible distributors, teasing out the potential effects engendered by China’s World Trade Organization accession, as well as excluding the confounding effects of 3-year graduates. We obtain similar results. Our findings shed light on the impact of the higher education expansion policy on robot imports in developing and transition countries.