The Impact of Subsidies on Film Quality: Empirical Evidence from France, Korea, the United Kingdom, and United States

Abstract

There is a widespread belief that the higher the level of subsidies, the better the performance of film industries (both in quantity and quality). This article focuses on film quality—evaluated by audiences and critics—and scrutinizes this assumption through four selected countries—France, Korea, UK, and US. The main findings of this article are summarized through two points. First, despite the Korean film industry receiving the lowest level of public support, its film quality is higher than that of other selected countries. Second, the impact of subsidies on film quality turns out to be positive for the French, UK, and US films while it is negative or nil for Korean films. Although these results reflect partly differences in the background of each film industry and its public support in the four countries, they suggest that the effectiveness of subsidies and enhancement of film quality can be best achieved by better designing the subsidy schemes—not by increasing their amount.

Keywords:

• Film industry
• subsidy
• film quality
• impact assessment
• cultural policy

Conflict of interest

The authors declare that they have no conflict of interest.

Notes

1 Some argue that countries can provide subsidies for political and cultural reasons. However, it is important to highlight that this scheme is one of many popular measures to support an industrial sector. Naturally, the focus of this paper is on economic analysis; thus, the relation between subsidies and the quality of films.

Additional information

Funding

The authors would like to express their gratitude to Michael Thom from the University of Southern California for his help on obtaining data on public support of the US. This work was supported by Laboratory Program for Korean Studies through the Ministry of Education of Republic of Korea and Korean Studies Promotion Service of the Academy of Korean Studies (AKS-2015-LAB-2250003). This study was also financially supported in part by the Institute of Communication Research, Seoul National University.