Cross-Country Variation in the Share of National Movies in Total Box Office Revenue

Abstract

This study investigates the cross-country variation in the share of national movies in total box office revenue using annual observations from a sample of 43 countries. For this purpose, the preference for national movies is associated with the size of domestic movie production (proxied by absolute and relative number of national movies produced), availability of top-class movie directors, cultural (national feeling) and institutional (level of democracy, freedom to access foreign information) indicators, and the presence of common languages spoken across countries. Our results reveal that higher national movie production (in absolute and relative terms), availability of top-level directors, and level of national feeling are positively associated with relative preference for national movies. Meanwhile the level of democracy, freedom to access foreign information, and the presence of common language are negatively associated with the share of national movies in total box office revenue. Overall, our results provide evidence for both home market effect and cultural discounting hypotheses from a macro level perspective. Movie producers, distributors, directors, and online-streaming content providers may use our findings to improve their creative and business strategies.