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Learning via sequential market entry: Evidence from international releases of U.S. movies

Listed author(s):
  • Holloway, Isaac R.
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    Most U.S. movies are not distributed simultaneously to all of their foreign markets and many do not recoup the costs of market entry. In theory, sequential entry allows distributors to learn about their movies' quality from performance in successive markets. I find empirical evidence consistent with recent trade models of learning about export profitability: a one-standard-deviation increase in the update to expected box-office revenues from the previous round is associated with an increase in the probability of entry to a given market of approximately 20%. This effect is robust to controls for other potential determinants of entry, including extended gravity, seasonality of demand, academy award nominations, and competition from local and imported pictures.

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    File URL: http://www.sciencedirect.com/science/article/pii/S0022199616301246
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    Article provided by Elsevier in its journal Journal of International Economics.

    Volume (Year): 104 (2017)
    Issue (Month): C ()
    Pages: 104-121

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    Handle: RePEc:eee:inecon:v:104:y:2017:i:c:p:104-121
    DOI: 10.1016/j.jinteco.2016.10.008
    Contact details of provider: Web page: http://www.elsevier.com/locate/inca/505552

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    10. Liran Einav, 2010. "Not All Rivals Look Alike: Estimating An Equilibrium Model Of The Release Date Timing Game," Economic Inquiry, Western Economic Association International, vol. 48(2), pages 369-390, 04.
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    15. Costas Arkolakis, 2010. "Market Penetration Costs and the New Consumers Margin in International Trade," Journal of Political Economy, University of Chicago Press, vol. 118(6), pages 1151-1199.
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