Learning via sequential market entry: Evidence from international releases of US movies

• 成果类型: Article
• 署名作者: Holloway, Isaac R.
• 署名单位: Western University (University of Western Ontario); University Western Ontario Hospital
• 刊物名称: JOURNAL OF INTERNATIONAL ECONOMICS
• ISSN/ISSBN: 0022-1996
• DOI: 10.1016/j.jinteco.2016.10.008
• 发表日期: 2017
• 页码: 104-121
• 关键词: Heterogeneous quality; sequential entry; Motion pictures; Cultural trade

摘要

Most U.S. movies are not distributed simultaneously to all of their foreign markets and many do not recoup the costs of market entry. In theory, sequential entry allows distributors to learn about their movies' quality from performance in successive markets. I find empirical evidence consistent with recent trade models of learning about export profitability: a one-standard-deviation increase in the update to expected box-office revenues from the previous round is associated with an increase in the probability of entry to a given market of approximately 20%. This effect is robust to controls for other potential determinants of entry, including extended gravity, seasonality of demand, academy award nominations, and competition from local and imported pictures. (C) 2016 Elsevier B.V. All rights reserved.