How can artificial intelligence boost firms' exports? evidence from China

Abstract

This paper explores the impact of artificial intelligence and industrial robots on firms' export behaviour and divides the impact mechanism into the productivity effect and labour substitution effect. It examines the effect of industrial robots on firms' export value by using Chinese Customs data, Chinese Industrial Firm data and robot data from the International Robot Federation (IRF). The main findings are as follows: Firstly, the impact of artificial intelligence and industrial robots on Chinese firms' export value is generally negative, which means the negative labour substitution effect dominates the positive productivity effect. Secondly, the impact of artificial intelligence varies significantly by industry, and the export value of firms from high-tech industries benefits from the use of industrial robots. Thirdly, the impact of artificial intelligence on firms' export value also varies by time; before 2003, the use of industrial robots showed mainly an inhibiting effect on firms' exports, which turned into a driving effect thereafter, and after 2006, industrial robots began to significantly promote firms' export. Finally, the higher the quality of export products, the more likely the use of industrial robots will be to promote firms' export value, and the higher the capital-labour ratio is, the more likely firms' export value will be to benefit from the use of artificial intelligence and industrial robots. On the basis of these findings, this study proposes promoting the productivity effect to dominate the labour substitution effect through technological progress and the improvement of export product quality.