An empirical study of the international co-production effect on trade: evidence from the Chinese movie industry

ABSTRACT

This article investigates thhe effect of international co-production on trade. Co-production, which allows a foreign producer to partner with domestic firms, has emerged as a way of promoting trade. Using the data on the Chinese movies, we find that international co production has a positive effect on both the extensive and intensive margins. We also show that the co-production effect is mainly explained by improvement in quality. Our research investigates international co production, a less explored topic in the literatures of international economics, which mainly focus on export and FDI.

KEYWORDS:

• International coproduction
• movie industry
• trade
• quality

JEL CLASSIFICATION:

• F14
• F13
• L82

Disclosure statement

No potential conflict of interest was reported by the authors.

Notes

¹ Data source: http://www.cfcc-film.com.cn

² Data source: Boxofficemojo.com

³ As box-office revenue is the most commonly used in the movie studies (e.g. Prag and Casavant 1994; Kim and Jensen 2014; Bae and Kim 2019), we only report the results with the dependent variable being box-office. We also used profit to measure the intensive margin. The results are qualitatively similar, which are available upon request.

⁴ The only exception is 3D movies, whose price is a few dollars higher than 2D movies (Orbach and Einav 2007; Ho et al. 2018).

Additional information

Funding

This work was supported by the China Postdoctoral Science Foundation [2019M660468], Central University of Finance and Economics Talent Program [2019], Fundamental Research Funds for the Central Universities [FRF-TP-19-062A1].