Artificial intelligence and the changing determinants of comparative advantage

Thornton, John ORCID: https://orcid.org/0000-0001-7580-3463 (2026) Artificial intelligence and the changing determinants of comparative advantage. Economia Internazionale. ISSN 2499-8265 (In Press)

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Abstract

Artificial intelligence (AI) has implications for how technological change influences comparative advantage and international specialization because it has the potential to change the importance of the factors that determine relative production costs. The paper develops a conceptual framework that distinguishes between the determinants of comparative advantage and the organizational forms through which it is expressed. It then argues that AI may reshape comparative advantage through four channels: by increasing the importance of complementary assets in determining productivity gains; by reinforcing increasing returns and the geographic concentration of frontier AI capabilities; by accelerating innovation; and by influencing the speed and breadth with which AI is diffused. The paper draws on the emerging literature to discusses the economic logic underlying each mechanism and derives implications for international specialization. It suggests that AI is likely to influence the location of knowledge-intensive activities within global value chains and the distribution of value created through them. Finally, it argues that whether AI reinforces existing comparative advantages or creates opportunities for catch-up depends on how widely AI technologies diffuse and on countries’ ability to translate AI adoption into lower relative production costs in internationally traded activities.

Item Type:	Article
Uncontrolled Keywords:	artificial intelligence,comparative advantage,international specialization,international trade,global value chains,1*,das to be completed ,/dk/atira/pure/researchoutput/REFrank/1_
Faculty \ School:	Faculty of Social Sciences > Norwich Business School
Depositing User:	LivePure Connector
Date Deposited:	27 Oct 2026 10:37
Last Modified:	27 Oct 2026 10:37
URI:	https://ueaeprints.uea.ac.uk/id/eprint/104867
DOI:	issn:2499-8265

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