The Welfare Effects of Vertical Integration in China's Movie Industry

• 成果类型: Article
• 署名作者: Chen, Luming; Yi, Xuejie; Yu, Chuan
• 署名单位: University of Wisconsin System; University of Wisconsin Madison; Stanford University
• 刊物名称: AMERICAN ECONOMIC JOURNAL-MICROECONOMICS
• ISSN/ISSBN: 1945-7669
• DOI: 10.1257/mic.20210320
• 发表日期: 2024
• 页码: 204-235
• 关键词: market foreclosure; theaters; mergers; prices; COSTS

摘要

This paper investigates the welfare effects of vertical integration in China's movie industry. We leverage data covering all theaters and 423 popular movies in China during 2014-2018. We find no evidence of integrated movies being foreclosed to rival theaters. Integrated theaters show movies for longer , allocate more screenings , and charge lower prices. We estimate a model of consumers' demand and theaters' screening decisions. Integrated theaters internalize a substantial fraction of their upstream companies' profits. Vertical integration mitigates distortions from revenue -sharing contracts and steers demand favoring integrated movies. Overall , vertical integration increases consumer surplus with considerable heterogeneity across markets. ( JEL D12, D22, L22, L82, O14, P23 )