The Effect of Virtual Reality-Enabled Manufacturing Practices on Production Efficiency

Xiong, Yangchun, Lam, Hugo KS ORCID: 0000-0002-4674-6145 and Karimi, Sahar ORCID: 0000-0002-0551-1040 (2024) The Effect of Virtual Reality-Enabled Manufacturing Practices on Production Efficiency International Journal of Production Economics, 274. p. 109288. ISSN 0925-5273

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Abstract

Firms have been increasingly adopting virtual reality (VR) technologies for manufacturing purposes, but it is still unclear whether and how such VR-enabled manufacturing practices (VRMPs) can help firms improve production efficiency. Analyzing a sample of 87 US treatment firms that have adopted VRMPs and 87 matched control firms without such adoption over the period of 2010–2020, our difference-in-differences estimation suggests that the treatment firms gain more production efficiency improvement when compared with the matched control firms. We also find that the production efficiency improvement arising from VRMPs is more pronounced for firms facing high levels of labor volatility and market dynamism. Our additional analysis further suggests that applying VR technologies into different manufacturing stages and in different industrial sectors can result in different degrees of production efficiency improvement. Overall, our study demonstrates the positive effect of VRMPs on production efficiency but also reveals how the effect can vary across firms depending on their operating environments, VR application fields, and industrial sectors.

Item Type:	Article
Uncontrolled Keywords:	35 Commerce, Management, Tourism and Services, 3507 Strategy, Management and Organisational Behaviour, 9 Industry, Innovation and Infrastructure
Divisions:	Faculty of Humanities & Social Sciences > School of Management
Depositing User:	Symplectic Admin
Date Deposited:	03 Jun 2024 09:20
Last Modified:	28 Nov 2025 02:30
DOI:	10.1016/j.ijpe.2024.109288
Related Websites:	Publisher
URI:	https://livrepository.liverpool.ac.uk/id/eprint/3181891
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