Boosting export competitiveness through firm automation

This paper unravels the effect of automation on international competitiveness through exports. We conduct our empirical analysis using a sample of firms from the World Bank Enterprise Survey, which spans 40 developed and developing countries over 2016–2022. Employing the recursive bivariate probit model, the fractional probit model, and the Lewbel's IV method to deal with endogeneity and reverse causality, we find that automation spurs the extensive and intensive margins of exports. We find stronger effect in manufacturing, high-productivity firms, and developed economies. Overall, automation can enhance export, but its effectiveness hinges on complementary investments and enabling ecosystems that support inclusive, productivity-driven trade growth.