Robot adoption and FDIs driven transformation in the automotive industry

This paper explores the relationship between inward FDIs and industrial robots adoption, across different segments of the automotive value chain. Using IFR and fDiMarket data at a fine level of disaggregation of the automotive sector, we illustrate to what extent FDIs could act as a trigger for upgrade through advanced production technology diffusion in 34 countries over 2005-2014. We find that different groups of countries and different segments of the value chain are characterised by distinct patterns of FDI and robot adoption. While there exists some correlation between FDIs and robot adoption in the OEMs segment, it seems less so for components. Moreover, some emerging countries are characterised by a much higher correspondence between FDIs and robot adoption than others, possibly revealing an important role played by the industrial ecosystem characterising strong adopters of this process technology.