Industrial robotisation and local taxes: Evidence from South Korea

Abstract

With the rapid advancement of industrial robotisation, growing attention has been paid to its broader economic implications; however, little is known about its fiscal impact on local governments. This study addresses this gap by being the first to empirically examine how robot adoption affects local tax revenues in South Korea—a country at the forefront of automation. Leveraging a Bartik-type instrument to establish causality, the analysis reveals that robotisation significantly increases both the volume and share of local tax revenues, particularly in manufacturing-intensive and rural regions. These findings highlight the fiscal potential of automation and offer novel insights for local fiscal policy design in the era of technological transformation.