Robots at home mean more factories abroad, not fewer

Companies that use more robots in their home country also invest more in building factories and production networks in other countries. This means automation does not reduce the need for international supply chains, but changes their nature.

Everyone assumed that if a company automated its production with robots, it would bring manufacturing back home or need less foreign investment. This paper shows the opposite: more robots at home means more foreign investment, specifically in setting up new production facilities abroad. It turns out, robots make companies more efficient at building complex global supply chains, not less reliant on them.