Abstract
We examine the effects of robotization on North–South trade patterns, wages and welfare. The empirical analysis uses ordinary least squares and instrumental-variable regressions exploiting variation in exposure to robots across countries and sectors. Both reveal that greater robot intensity in own production leads to: (i) a rise in imports sourced from less developed countries in the same industry; and (ii) an even stronger increase in exports to those countries. To explain these findings we develop a stylized Ricardian model featuring two-stage production and trade in intermediate and final goods in which robots can take over some tasks previously performed by humans in a subset of industries. An increase in robot adoption in the North impacts trade in final and intermediate goods with the South, as well as wages and welfare.
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