Automation and Off(Re)Shoring: A Meta-Regression Analysis

Abstract

Offshoring characterizes much of the globalization phenomenon of the last century. However, the rapid development of automation technologies, combined with the disruption of Global Value Chains experienced at the international level, have put pressure on multinational's decisions regarding location of production activities.The ongoing debate on the effects of automation on off(re)shoring movements has gained growing attention. On the one hand, a relevant branch of related literature advocates that automation may facilitate the return of production to origin countries, thereby contributing to the increase of the reshoring movements. On the other hand, another branch of the literature argues that such increases are not directly related to automation and that the process of robotization may even contribute to increase offshoring.In face of these apparently contradictory results, we conduct a meta-analysis on the empirical literature that estimates the impact of automation on off(re)shoring. After correcting for publication bias, we find that the overall effect of automation on reshoring is positive and significant, both in developed and developing countries. We also find that the heterogeneity in the reported effects is explained by differences in the studies' methodological characteristics.