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Effects of Trade Barriers and Cultural Distance on the Domestic Market Share in the Film Industry

Published online by Cambridge University Press:  14 May 2019

Yong-Jae Choi ,
Chung-ki Min Open the ORCID record for Chung-ki Min [Opens in a new window]  and
Chanyul Park Open the ORCID record for Chanyul Park [Opens in a new window]
Yong-Jae Choi
Affiliation:
Hankuk University of Foreign Studies, Korea
Chung-ki Min*
Affiliation:
Hankuk University of Foreign Studies, Korea
Chanyul Park
Affiliation:
Gyeongnam Development Institute, Korea
*
*Email: [email protected]
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Abstract

The objective of this study is to investigate the effects of trade barriers and cultural distance on the domestic market share in the film industry. We analyze panel data with both two-stage least squares and instrumental-variable methods. These methods can separate the effects of time-invariant measures of trade barriers and cultural difference from country-specific effects. This improvement in the estimation method and the use of a more appropriate measure of trade barriers in the film industry enable us to produce empirical results that are consistent with theoretical arguments. Based on the panel data collected from 30 countries for the period 2001–2013, the empirical results herein indicate that the cultural distance, as well as market size, is an important factor for the domestic market share. Trade barriers are also shown to be a significant factor, but the magnitude of their impact on the domestic market share is much smaller than that of the market size.

Type
Research Article
Information
World Trade Review , Volume 19 , Issue 1 , January 2020 , pp. 61 - 74
Copyright
Copyright © Yong-Jae Choi, Chung-ki Min, and Chanyul Park 2019

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