Research Proposal

On

The Effect of AI on Modernizing Trade and Employment in

Developing Nation

Course Title: International Econmic 1

Course Code: ECO 4102

Submitted By: Under the supervision By:

Afshana Sharmin Habibur Rahman
ID No: 1903049 Associate Professor,
Registration No :000012635 Department of Economics,
Session :2019-2020 Begum Rokeya University, Rangpur.
BSS 4th Year 1st Semester
Department of Economics,
Begum Rokeya University, Rangpur.

Date of Submission: 18 March, 2024

Table of Contents
CHAPTER -1 ............................................................................................................................. 1
Introduction:........................................................................................................................... 1
Background of the study: ................................................................................................... 1
CHAPTER - 2: ........................................................................................................................... 2
Objective of the study: ........................................................................................................... 2
2.1 General objective: ........................................................................................................ 2
CHAPTER-3: ............................................................................................................................. 3
Research Questions: ............................................................................................................... 3
CHAPTER-4: ............................................................................................................................. 3
Literature Review: ................................................................................................................. 3
Chapter- 5 .................................................................................................................................. 3
Research methodology: .......................................................................................................... 3
5.1 study area: .................................................................................................................... 3
5.2 Data Sampling:............................................................................................................. 4
Implementation : ................................................................................................................ 4
Chapter 6 .................................................................................................................................... 4
Result: .................................................................................................................................... 4
Chapter 7 .................................................................................................................................... 5
Conclusion: ............................................................................................................................ 5
Chapter 8 .................................................................................................................................... 5
Reference: .............................................................................................................................. 5
CHAPTER -1

Introduction:
The past ten years have seen an enormous increase in computer science (AI), along
with associated technologies like machine learning, robotics, and neural systems.
Given that AI holds promise as a novel .The development of new manufacturing
technologies and products that can be used in a variety of fields, such as the Internet
of Things, dark manufacturing, autonomous vehicles, remote medical monitoring and
diagnosis systems, and others, has been revolutionized by advances in AI-related
technologies, also known as general-purpose electronic devices (GPT) (Trajtenberg,
2018).(Tay, 2021a) On the other hand, improvements in efficiency from AI
technology could not happen right away when it is put into use (Jovanovic and
Rousseau, 2005).(Tay, 2021a) AI may also be utilized to enhance the results of talks
on international trade. AI might be used, for example, to more accurately assess each
negotiation partner's economic trajectory under various assumptions, like Trade-
related outcomes (growth paths under various kinds of liberalization), how trade
barriers are reduced at various rates in a multiplayer scenario, and projecting trade
reactions from non-negotiating nations are all contingent on trade negotiations. AI is
being used by Brazil to enhance trade discussions as part of its Intelligent Tech and
Trade Initiative. 1.(Tay, 2021b)

Background of the study:

Global value chain growth and management are already being impacted by AI. It can
be applied to better manage risk along the supply chain and to forecast future trends,
such as shifts in consumer demand. By permitting by enabling businesses to more
effectively oversee intricate and distributed production units, these solutions raise
GVCs' total productivity. Businesses can utilize AI, for instance, to enhance demand
forecasting, warehouse management, and just-in-time production and delivery
accuracy. Robotics can improve packing and inventory check efficiency and
productivity. AI can also be used by businesses to enhance logistics, asset
maintenance, and physical inspection.(Frank et al., 2019)

Problem Statement:

The impact of artificial intelligence on global trade is discussed in the article, along
with a number of important issues that are associated with it. The following ten issues
are covered in the paper:

1. Slow productivity growth and its possible connection to the adoption of new
technology, especially artificial intelligence.
2. The amount of time needed for economies to successfully adopt and utilize
sophisticated technologies like AI.
3. The requirement for supplementary investments, such as access to qualified
personnel and business procedures, in order to fully benefit from AI investments.

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4. The possible loss of blue-collar, low-skill jobs in manufacturing sectors as a result
of AI automation.
5. AI has expedited the shift to service economies, changing the nature and standard
of economic growth and having an impact on global commerce.
6. How AI is affecting the creation and administration of global value chains (GVCs).
7. The possible trend of production being moved in-house as a result of increased
automation possibilities and 3D printing scalability.
8. The effect of AI on online platforms and the unparalleled chance for small
enterprises to expand internationally.
9. The potential application of AI to enhance the results of trade talks on a global
scale.
10. The value of information in the creation of AI and how data localization
techniques affect the ability to create customized AI capabilities.
These are the ten issues surrounding the influence of AI on global trade.

CHAPTER - 2:
Objective of the study:
Hare I indicate mainly two types of objective.

2.1 General objective:

i. Artificial intelligence's effects on global trade.

ii. The field of artificial intelligence (AI) has the potential to revolutionize global
trade.

iii. Broader existential issues are brought up by general AI, such as how to match the
objectives of such a system with our own to avert catastrophe. Results, but universal
AI is still an innovation that needs to be developed shortly.

iv. The effects of AI on global trade and growth in the economy.

2.2 Specific objective:

i. Talking about the macroeconomic implications of AI and the trade consequences

that go along with it, especially in terms of commercial growth and productivity.
ii. Examining how AI might affect the kind and standard of economic growth, with
consequences for global commerce and the quickening of the shift to services-based
economies.
iii. Analyzing particular uses of AI to trade internationally, including how it affects
digital platforms, global value chains, and trade discussions.

iv. Determining the main domains—such as the significance of data for AI, privacy
concerns, guidelines, intellectual property protection, and trade in goods—where trade
regulations might facilitate the development and application of AI internationally.

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CHAPTER-3:
Research Questions:
I) How the impact of AI on a specific industry in developing nations (e.g., agriculture,
manufacturing, e-commerce)?

ii) What is the potential for AI to create new job opportunities in developing nations?

iii) What are the challenges of implementing AI for trade and employment in
developing countries (e.g., data privacy, infrastructure gap)?

iv) How much contribute AI international trade in developing countries?

CHAPTER-4:
Literature Review:
According to studies on international trade, the advancement of AI will have an array
of benefits for international commerce. Meltzer (22018) argued that the first is the
macroeconomic implications of AI and the trade consequences. For instance, if AI
increases productivity growth, this would boost economic development and open up
new opportunities for international commerce. AI will also influence the kind and
level of growth in economies, which will have an impact on trade. For instance, AI is
expected to hasten the shift to service economies. This is a natural progression of
concerns regarding AI's impact on jobs, as it is expected to increase automation and
accelerate job losses for low-skilled, blue-collar workers in industrial settings.
Furthermore, Meltzer (2018) contended that there is a good chance artificial
intelligence (AI) will fundamentally alter global trade. Already, several applications
in domains such as machine translation and data processing are assisting in reducing
the barriers to trade. International trade regulations may be able to alleviate some of
the challenges that artificial intelligence is facing as it advances. Increasing global
access to data that can be employed to train AI systems is one of these
challenges.(Jayathilaka, 2022)

Chapter- 5
Research methodology:
The maximum data collected secondary sources.

5.1 study area:

i. Trade barriers are being lowered by specific apps in fields like data analytics and
services for translation.

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5.2 Data Sampling:

Variable Coefficient Std. Error t-Statistic Prob.

GDP 1.0226 0.0484 21.08 <0.01
AI 0.9926 0.0468 21.172 <0.01
INF -0.988 0.0498 -19.96 <0.01
TR -1.0028 0.0457 20.83 <0.01
ER 1.0156 0.0487 20.8328 <0.01
C 47.2038 5.38 8.77 <0.01

Implementation :
Here horizontal axis shows that Coefficient,Std. Error,t-Statistic and Prob. Also
vertical axis shows that GDP,AI,INF,TR,ER,C and hight Coefficient 47.2038.

Chapter 6

Result:
R-squared 0.824443
Mean dependent var 76.43112
Adjusted R-squared 0.822966
S.D. dependent var 56.26901
S.E. of regression 23.67544
Sum squared resid 332952.8
F-statistic 557.9044
Durbin-Watson stat 2.009436
Prob(F-statistic <0.0100

Shows the confidence intervals for each independent variable at the 90%, 95%, and
99% statistical confidence levels. The associated confidence intervals at ninety-five
are displayed in the third diagram. The table and picture both show that the
coefficients' low and high values Continue at the anticipated times with the
anticipated signs. The first and second tables exhibit the outcomes of the fixed effect
model and random effect model, respectively. Trade volume (trade) is the dependent
variable in our model, as previously said, and we have included five independent
variables in the formula. The following are them: 1) There is gross domestic product
(G); 2) AI; 3) trade constraints (TR); 4) exchange rate (ER); and 5) inflation rate (inf).
Tables 1 and 2 show the outcomes for fixed effects and

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Chapter 7
Conclusion:

Although some industries are currently experiencing the transformative impact of AI,
many more global economic benefits are anticipated in the years to come. At this
point, it continues to have a significant impact on corporate operations and economic
growth. A more current surge of

The world's economy is shifting due to technologies, which are being driven by
developments in computers, telecommunications, and the global communication
networks they have created. Insofar as AI boosts productivity growth, it will promote
more robust economic development and open new avenues for global trade. The
adoption and application of new AI technologies, which require significant financial
outlays, a pool of skilled people, and a shift in business practices, will nevertheless
take a while.

Chapter 8
Reference:
Frank, M. R., Autor, D., Bessen, J. E., Brynjolfsson, E., Cebrian, M., Deming, D. J.,

Feldman, M., Groh, M., Lobo, J., Moro, E., Wang, D., Youn, H., & Rahwan, I.

(2019). Toward understanding the impact of artificial intelligence on labor.

Proceedings of the National Academy of Sciences, 116(14), 6531–6539.

https://doi.org/10.1073/pnas.1900949116

Jayathilaka, U. R. (2022). The Role of Artificial Intelligence In Accelerating

International Trade: Evidence From Panel Data Analysis. 5(1).

Tay, C. (2021a). The Impact of Artificial Intelligence on International Trade:

Evidence From Google Neural Machine Translation. Journal of Technological

Advancements, 1(1), 1–20. https://doi.org/10.4018/JTA.20210101.oa6

Tay, C. (2021b). The Impact of Artificial Intelligence on International Trade:

Evidence From Google Neural Machine Translation. Journal of Technological

Advancements, 1(1), 1–20. https://doi.org/10.4018/JTA.20210101.oa6