How Industry 4.0 Adoption Boosts Labor Productivity : Evidence from Italian Smes

Does technology adoption push firms’ labor productivity? We contribute to this debate – mainly focused on robotics and large firms – by analyzing micro, small and medium enterprises’ labor productivity returns of Industry 4.0 technology adoption. We rely on original survey data on Italian manufacturing firms providing detailed information on a variety of technologies, and combine them with balance sheet figures. We rely on staggered difference-in-differences and event study design estimation approaches. We find that Industry 4.0 technology adoption leads to a 7% increase in firms’ labor productivity. However, we also find that this effect decreases over time, and is highly heterogeneous with respect to both the number and variety of technologies adopted, and the technological level of the adopters