The Tower of Babel: Localization, translation, and international trade

IF 2.4 2区经济学 Q1 ECONOMICS

European Economic Review Pub Date : 2025-09-08 DOI:10.1016/j.euroecorev.2025.105123

Han Yang , Yuta Watabe , Eugene Kanasheuski

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Abstract

Localization involves adapting products for different regions or markets. Using cross-country sales data of PC games from Steam, a global digital distribution platform, we provide the first quantitative assessment of localization’s economic impacts. The ability of a single video game to accommodate multiple languages simultaneously offers a unique opportunity to study the effects of localization on international trade. Exploiting within-game linguistic variations, we find a large positive effect of localization on trade flows in target markets. To quantify the consumer benefits of localization, we develop a multi-country model and conduct counterfactual analyses. Compared to a world with complete absence of localization, we find that existing translation efforts account for 12.10% of consumer gains on average, while universal localization for all destinations would increase consumer gains by 9.31%. We also estimate localization costs across languages, revealing substantial variation. Our findings underscore the importance of localization on international trade and consumer welfare, with implications for firms and policymakers in the digitally connected global economy.

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巴别塔：本地化、翻译与国际贸易

本地化包括调整产品以适应不同的地区或市场。利用全球数字分销平台Steam的PC游戏跨国销售数据，我们首次对本地化的经济影响进行了定量评估。一款电子游戏同时兼容多种语言的能力为研究本地化对国际贸易的影响提供了一个独特的机会。利用游戏内部的语言差异，我们发现本地化对目标市场的贸易流有很大的积极影响。为了量化本地化给消费者带来的好处，我们开发了一个多国模型并进行了反事实分析。与完全没有本地化的世界相比，我们发现现有的翻译工作平均占消费者收益的12.10%，而所有目的地的通用本地化将使消费者收益增加9.31%。我们还估算了不同语言的本地化成本，揭示了巨大的差异。我们的研究结果强调了本地化对国际贸易和消费者福利的重要性，这对数字化连接的全球经济中的企业和政策制定者具有启示意义。

本文章由计算机程序翻译，如有差异，请以英文原文为准。

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来源期刊

European Economic Review ECONOMICS-

CiteScore

4.70

自引率

3.60%

发文量

170

期刊介绍： The European Economic Review (EER) started publishing in 1969 as the first research journal specifically aiming to contribute to the development and application of economics as a science in Europe. As a broad-based professional and international journal, the EER welcomes submissions of applied and theoretical research papers in all fields of economics. The aim of the EER is to contribute to the development of the science of economics and its applications, as well as to improve communication between academic researchers, teachers and policy makers across the European continent and beyond.