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Automation and the displacement of labor by capital: Asset pricing theory and empirical evidence

Abstract:

I examine the asset pricing implications of technological innovations that allow capital to displace labor: automation. I develop a theory in which firms with high share of displaceable labor are negatively exposed to such technology shocks. In the model, firms optimally adopt technology to gain competitive advantage in the product market. Although automation increases an individual firm's competitive advantage, in equilibrium competition erodes profits and decreases firm value. Empirically, ...

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Publication status:
Not published
Peer review status:
Not peer reviewed

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Publisher copy:
10.2139/ssrn.3293405

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Institution:
University of Oxford
Division:
Social Sciences Division
Department:
Said Business School
Oxford college:
Kellogg College
Role:
Author
Publication date:
2018-12-09
DOI:
Source identifiers:
1053311
Keywords:
Pubs id:
pubs:1053311
UUID:
uuid:eafc60f6-5f69-41cc-b0e5-0ea3befd16d9
Local pid:
pubs:1053311
Deposit date:
2019-09-13

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