Major technological changes have come with an adjustment period of stagnant productivity before the economy operates at its full potential. The mechanism of this adoption process is still not well understood. Using event studies, I document that productivity increases with a five-year lag after the adoption of industrial robots in Brazil. I build a dynamic general equilibrium model with heterogeneous firms, endogenous robot adoption, and organizational capital accumulation. Imperfect transferability of organizational capital across technologies and labor reallocation of workers across tasks reduce productivity in the short run and the productivity increase occurs after some time. I combine employer-employee matched data with a novel measure of robot adoption and provide the first evidence of plant-level labor reorganization across occupations and organizational capital depreciation induced by the automation process. During five years after adoption, labor switching increases across occupations within firms, moving from production to support activities. I also show that firms’ organizational capital measured by workers’ firm-occupation specific experience depreciate and then slowly re-accumulate. When these processes stop, productivity gains appear. I use these results to estimate the model and analyze the transition path after the possibility of technology adoption opens. I use the estimated model to evaluate the dynamic effects of tax and subsidies targeted both on robots and organizational capital.
Conferences and Seminars: U Toronto, NBER SI, NASMES, SED, GWUSB, U Delaware, U Los Andes, U Queensland, ITAM Business, Banco de México, PUC Chile, Harvard, HBS, Boston U (TPRI), LACEA–LAMES, LACEA–RIDGE, World Bank, EEA, Georgetown (Macro, Trade), GU-McDonough (Strategy), AOM (TIM–Doctoral Consortium), Wharton Innovation Doctoral Symposium.