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research-article

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

Authors: Erik Brynjolfsson, Xiang Hui, Meng LiuAuthors Info & Claims

Management Science, Volume 65, Issue 12

Pages 5449 - 5460

https://doi.org/10.1287/mnsc.2019.3388

Published: 01 December 2019 Publication History

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.

This paper was accepted by Joshua Gans, business strategy.

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Information

Published In

cover image Management Science

Management Science Volume 65, Issue 12

December 2019

508 pages

ISSN:0025-1909

DOI:10.1287/mnsc.2019.65.issue-12

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Copyright © 2019, INFORMS.

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INFORMS

Linthicum, MD, United States

Publication History

Published: 01 December 2019

Accepted: 18 April 2019

Received: 18 April 2019

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Cited By

Hui XReshef OZhou L(2024)The Short-Term Effects of Generative Artificial Intelligence on EmploymentOrganization Science10.1287/orsc.2023.1844135:6(1977-1989)Online publication date: 1-Nov-2024
https://dl.acm.org/doi/10.1287/orsc.2023.18441
Sun TYuan ZLi CZhang KXu J(2024)The Value of Personal Data in Internet CommerceManagement Science10.1287/mnsc.2023.482870:4(2645-2660)Online publication date: 1-Apr-2024
https://dl.acm.org/doi/10.1287/mnsc.2023.4828
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https://dl.acm.org/doi/10.1287/mnsc.2023.4770
Yang L(2024)Improving Artificial Intelligence Translation Ability Based on Attention Mechanism and Layer Jumping ConnectionProceedings of the 2024 3rd International Conference on Frontiers of Artificial Intelligence and Machine Learning10.1145/3653644.3658509(286-290)Online publication date: 26-Apr-2024
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