Have Industrial Robots Improved Pollution Reduction? A Theoretical Approach and Empirical Analysis

• Published date: 01 July 2023
• Author: Huzhou Zhu,Bin Sang,Chunyuan Zhang,Lin Guo
• Date: 01 July 2023
• DOI: http://doi.org/10.1111/cwe.12495

©2023 Institute of World Economics and Politics, Chinese Academy of Social Sciences

China & World Economy / 153–172, Vol. 31, No. 4, 2023 153

Have Industrial Robots Improved Pollution Reduction?

A Theoretical Approach and Empirical Analysis

Huzhou Zhu, Bin Sang, Chunyuan Zhang, Lin Guo*

Abstract

To investigate whether industrial robots have improved the ecological environment,

this study integrated the adoption of robot technology and pollution abatement into

Melitz’s heterogeneous firm model. This showed that using robots in production can

lower firms’ pollution intensity by increasing their abatement investments, and this

reduction eff ect is greater for higher polluting fi rms and those subject to weaker local

environmental regulations. These theoretical expectations were then confi rmed through

a series of empirical investigations based on Bartik instrument regressions, with

multiple robustness checks as well as heterogeneity and mechanism analyses. This paper

adds to the literature on the relationships between automation technologies and green

transformation. It shows that in the pursuit of economic growth and environmental

protection, it is necessary for policymakers to shift from pollution control to technical

support for traditional manufacturing fi rms.

Keywords: automation technologies, ecological environment, green transformation,

industrial robots, pollution intensity

JEL codes: O33, Q50, Q56

I. Introduction

The use of automation technology in manufacturing has accelerated since the Fourth

Industrial Revolution (Industry 4.0) was introduced at the Hannover Messe trade fair

in 2011. Industrial robots, a representative example of such technology, are defi ned by

the International Federation of Robotics (IFR) as machines or devices used in industrial

automation and programmed to perform various manufacturing functions by relying on

*Huzhou Zhu, PhD Candidate, School of Economics, Zhejiang University, China. Email: 11801005@zju.edu.

cn; Bin Sang, Lecturer, School of Accounting Zhejiang Financial College, China. Email: sangbin0304@163.

com; Chunyuan Zhang, PhD Candidate, School of Economics, Zhejiang University, China. Email: zcyuan@

zju.edu.cn; Lin Guo (corresponding author), Lecturer, School of Management, Weifang Medical University,

China. Email: guolin86@zju.edu.cn. This research was supported financially by the Zhejiang Provincial

Philosophy and Social Science Planning Project (No. 21NDQN303YB).

Huzhou Zhu et al. / 153–172, Vol. 31, No. 4, 2023

©2023 Institute of World Economics and Politics, Chinese Academy of Social Sciences

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artificial intelligence technologies. Figure 1 shows trends in the number of industrial

robot installations in the world’s top five economies. Before 2009, Japan led the rest

of the world, with its annual number of installations fl uctuating around 100,000. The

US, China, and Germany, meanwhile, experienced higher but moderate growth in

the adoption of industrial robots. India experienced relatively little change. The years

after 2009 witnessed a boom in industrial robotics in all five countries, especially in

China. Arguably, the increasing installation of robots worldwide refl ects a new trend in

industrial development that could continue into the future.

Figure 1. The evolution trend of industrial robot installations in the major economies

Source: International Federation of Robotics.

Automation technology, represented by industrial robots, has led to significant

increases in production efficiency (Jäger et al., 2015; Graetz and Michaels, 2018;

Acemoglu and Restrepo, 2020). However, long-term reliance on these industries to drive

economic growth is bound to consume significant amounts of fossil fuels and produce

large amounts of pollutant emissions,which are not always environmentally friendly.

These factors contribute to global warming, which leads to frequent outbreaks of extreme

weather. Moreover, there is a decline in drinking water quality, and excessive heavy

metals can cause contamination. These ecological issues threaten human health and hinder

sustainable economic development. In 2019, the United Nations Environment Programme

released the Global Environment Outlook, which is the most comprehensive and rigorous

assessment of the global environment, warning that the Earth’s ecosystem had been

severely damaged and would worsen increasingly without urgent and strong action.