How the adoption of robots has influenced global sourcing activities among Spanish manufacturing firms

The research led by UB School of Economics researchers Rosina Moreno and Raúl Ramos and PhD alumni Akin Cilekoglu examines data from 2006 to 2016, focusing on how firms’ sourcing strategies—both from domestic and foreign suppliers—were affected by the introduction of robots. The study, named “The Impact of Robot Adoption on Global Sourcing”, which investigates the impact of robots on outsourcing and vertically integrated firms, presents important insights into the evolving dynamics of international trade and production.

The findings reveal that robot adoption led to an increase in the purchase of intermediate goods from foreign suppliers, while it did not significantly impact purchases from domestic suppliers. This suggests that, despite concerns about reshoring—the process of returning production activities back to a firm’s home country—robots have in fact promoted the continuation and expansion of global trade in intermediate inputs. The study challenges the belief that robot adoption would lead to a significant reshoring trend by replacing foreign labor with automated domestic production. Instead, the use of robots seems to complement global supply chains, reinforcing international sourcing rather than reducing it.

The research presents a theoretical framework to align its assumptions with observed data, offering a comprehensive understanding of how labor-saving technologies, such as robots, affect firms’ global sourcing decisions. By analyzing firm-level data, the study provides a microeconomic perspective, examining sourcing strategies like foreign outsourcing, foreign vertical integration, domestic outsourcing, and domestic vertical integration. The methodology includes a staggered difference-in-differences approach, ensuring robust results that consider potential biases and shocks.

This paper contributes to the growing literature on automation, reshoring, and global value chains by providing firm-level evidence of how robotics impacts production fragmentation and international trade. The findings suggest that instead of replacing foreign labor, robots may actually enhance global production networks, particularly for Spanish firms, by continuing to source intermediate goods from foreign suppliers. These insights are critical for understanding how technological advancements are shaping the future of global sourcing and trade.