Does Machine Translation Affect International Trade? Evidence from a Large Digital Platform

Erik Brynjolfsson, Xiang Hui () and Meng Liu ()
Additional contact information
Xiang Hui: Marketing, Olin School of Business, Washington University in St. Louis, St. Louis, Missouri 63130
Meng Liu: Sloan School of Management, Massachusetts Institute of Technology, Cambridge, Massachusetts 02142

Management Science, 2019, vol. 65, issue 12, 5449-5460

Abstract: Artificial intelligence (AI) is surpassing human performance in a growing number of domains. However, there is limited evidence of its economic effects. Using data from a digital platform, we study a key application of AI: machine translation. We find that the introduction of a new machine translation system has significantly increased international trade on this platform, increasing exports by 10.9%. Furthermore, heterogeneous treatment effects are consistent with a substantial reduction in translation costs. Our results provide causal evidence that language barriers significantly hinder trade and that AI has already begun to improve economic efficiency in at least one domain.

Keywords: artificial intelligence; international trade; machine translation; machine learning; digital platforms (search for similar items in EconPapers)
Date: 2019
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Citations: View citations in EconPapers (44)

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https://doi.org/10.1287/mnsc.2019.3388 (application/pdf)

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Working Paper: Does Machine Translation Affect International Trade? Evidence from a Large Digital Platform (2018)
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