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α: calibrated so average coauthorship-adjusted count equals average raw count
Recent evidence suggests that in manufacturing, automation technologies entail a trade-off between productivity gains and employment losses for the economies that adopt them. This paper casts doubts on such trade-off in the context of a developing country. It shows significant employment gains from automation in Indonesian manufacturing during the years 2008–2015, a period of rapid increase in robot imports. Analysis based on manufacturing plant data provides evidence that the absence of this trade-off is due to diminishing productivity returns to robot adoption. As a result, the benefits from automation could be particularly large for countries at early stages of industrialization.