Industrial Robot Imports and Firm Innovation: A Large Language Model

ABSTRACT This paper studies the effect of industrial robot imports on firm innovation. Our findings reveal that importing robots is conducive to improving corporate innovation. The main effect holds after addressing potential endogeneity concerns and conducting a series of robustness checks. Using a large language model (BERT), we identify three main mechanisms through which robot imports enhance firm innovation: a positive technology spillover effect, a negative R&D crowding‐out effect and a positive scale expansion effect. We also find a peer effect in the import of robots. Further analysis shows that the beneficial effects of robot imports on innovation are significant only among firms in the eastern regions and non‐SOEs.