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Star power and box office revenues: evidence from China

Author

Listed:
  • Fei Peng

    (Shanghai Lixin University of Accounting and Finance)

  • Lili Kang

    (Shanghai Lixin University of Accounting and Finance)

  • Sajid Anwar

    (Shanghai Lixin University of Accounting and Finance
    USC Business School, University of the Sunshine Coast)

  • Xue Li

    (Shanghai Lixin University of Accounting and Finance)

Abstract

Using data over the 2009–2016 period, this paper examines the impact of star power on box office revenues in China. Unlike most existing studies, we measure star power as a continuous variable based on the number of registered fans of movie stars on the most popular microblogging website in China (Sina Weibo). We also examine the impact of star power on box office revenues through three important channels (industry recognition, internet media evaluation, and internet media buzz). Estimation of log-linear specifications shows that directors play an important role in the financial success of movies in China. The direct effect of star power on the financial success of movies is negative, and the same applies to the direct effect of internet media evaluation. The indirect quality effect of star power through industry recognition is positive but insignificant. The marginal effect of industry recognition becomes significantly positive only when the level of star power reaches the second quartile of its distribution. The indirect signal effect of star power through internet media evaluation is negative and statistically significant. However, the indirect signal effect through internet media buzz is positive and significant at all levels of star power and this effect dominates the negative direct effect of star power once it reaches a threshold level. Endogeneity-corrected estimation results confirm that the total effect of star power on box office revenues in China is positive and significant. The Chinese movie industry, which appears to be dominated by low-quality movies, can benefit from further reforms.

Suggested Citation

  • Fei Peng & Lili Kang & Sajid Anwar & Xue Li, 2019. "Star power and box office revenues: evidence from China," Journal of Cultural Economics, Springer;The Association for Cultural Economics International, vol. 43(2), pages 247-278, June.
    • Handle: RePEc:kap:jculte:v:43:y:2019:i:2:d:10.1007_s10824-018-9338-0
    DOI: 10.1007/s10824-018-9338-0
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    4. Kang, Lili & Peng, Fei & Anwar, Sajid, 2022. "All that glitters is not gold: Do movie quality and contents influence box-office revenues in China?," Journal of Policy Modeling, Elsevier, vol. 44(2), pages 492-510.
    5. Fan, Liu & Zhang, Xiaoping & Rai, Laxmisha, 2021. "When should star power and eWOM be responsible for the box office performance? - An empirical study based on signaling theory," Journal of Retailing and Consumer Services, Elsevier, vol. 62(C).

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    More about this item

    Keywords

    Star power in China; Box office revenues; Industry recognition; Internet media evaluation; Internet media buzz;
    All these keywords.

    JEL classification:

    • C38 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Classification Methdos; Cluster Analysis; Principal Components; Factor Analysis
    • L82 - Industrial Organization - - Industry Studies: Services - - - Entertainment; Media
    • L86 - Industrial Organization - - Industry Studies: Services - - - Information and Internet Services; Computer Software
    • Z11 - Other Special Topics - - Cultural Economics - - - Economics of the Arts and Literature

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