Cross-Border Circulation of Films and Cultural Diversity in the EU

Journal of Cultural Economics, 42:645–676 (2018)

32 Pages Posted: 18 Mar 2019

See all articles by Georgios Alaveras

Georgios Alaveras

European Union - Institute for Prospective Technological Studies (IPTS)

Estrella Gomez-Herrera

Joint Research Center of the European Commission

Bertin Martens

Joint Research Centre

Date Written: November 1, 2018

Abstract

This paper explores new data sources on multi-lateral trade in films among EU countries and with the US in offline cinema and in online video-on-demand (VoD) distribution. We observe variations in trade patterns across countries and films and explore how they affect cultural diversity. We find that the EU film market is highly fragmented and cross-border film availability in cinema is low. We explore different aspects of the cultural discount hypothesis by means of a standard Helpman and Krugman (1985) trade model with economies of scale and a two-stage Heckman (1979) estimation procedure. Our results show that cultural distance, success in the home market and the size of the film budget influence trade of films between countries. US films have a lower propensity to get into export markets, relative to their success in the home market. Consumer demand for imported films is relatively smaller in large EU economies, except for films imported from the US that are only marginally affected. We also show that trade patterns in online film distribution are not fundamentally different. As online distribution occurs downstream from theatrical release, online distributors can benefit from cinema market experience to make a better selection of films. This results in a lower impact of domestic market shares on online trade patterns.

Keywords: international trade, films, cinema, online media, cultural diversity

JEL Classification: F13, F14, Z10

Suggested Citation

Alaveras, Georgios and Gomez-Herrera, Estrella and Martens, Bertin, Cross-Border Circulation of Films and Cultural Diversity in the EU (November 1, 2018). Journal of Cultural Economics, 42:645–676 (2018), Available at SSRN: https://ssrn.com/abstract=3342022

Georgios Alaveras

European Union - Institute for Prospective Technological Studies (IPTS) ( email )

Edificio Expo, C
Inca Garcilaso, s/n
Sevilla, E-41092
Spain

Estrella Gomez-Herrera (Contact Author)

Joint Research Center of the European Commission ( email )

Via E. Fermi 2749
1049
Belgium

Bertin Martens

Joint Research Centre ( email )

Edificio Expo, C
Inca Garcilaso, s/n
Sevilla, E-41092
Spain

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