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GTAP Resource #7288

"Robots Reshaping Spatial Dynamics: The Quantitative Effects of Robots on Chinese Firms’ Global Relocation Trends"
by Zheang, Chen, Pei Jiansuo and Peng Kaixuan


Abstract
In a unified large-scale economy like China, the broad inland market is key on mitigating external shocks and promoting spatial growth. As firms’ spatial distributions are important in developing the inland market and explaining market dynamics, we focus on how automation technologies, exemplified by robots, work as driving forces of firms’ entry-exit dynamics and spatial distribution. We construct a multi-regional and multi-sectoral dynamic quantitative spatial equilibrium model that incorporates robots, firms’ spatial distribution and labor migrations. We find that the inter-regional mobility of manufacturing firms exhibits a “spatial gradient” in China, which is driven by the intra-industry competition in eastern provinces, as well as the supply chains spillovers. We also show that subsidies for robots will increase local long-term equilibrium welfare and labor forces, where the increase effect on labor demand in inland areas from newly-located firms surpasses the decrease effect from the substitution of robots on labors. Our work implicates that subsidizing robots in inland areas will increase long-term welfare, while subsidies in coastal areas show little impact. Moreover, the inland area closest to coastal areas show most pronounced welfare benefits.


Resource Details (Export Citation) GTAP Keywords
Category: 2024 Conference Paper
Status: Not published
By/In: Presented during the 27th Annual Conference on Global Economic Analysis (Fort Collins, Colorado, USA)
Date: 2024
Version: The second version
Created: Zheang, C. (4/15/2024)
Updated: Zheang, C. (11/18/2024)
Visits: 155
- Domestic policy analysis
- Dynamic modeling


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