Protective trade policy and global film market

Abstract

Acknowledging the economic and cultural significance of developing national film industries, and in responding to the debate concerning cultural protectionism in the international community, this study aimed to investigate one key issue that would shed some light on the practical function of cultural protectionism, namely, do trade protectionism methods work? How do they work? Do they work toward their stated objectives? The research was conducted based on an investigation of six trade protective policies on the development of national film industries in 78 countries over an eight-year period from 2000 to 2007. It developed two composite TB indices and ten film performance measurement dimensions. The result found the criticisms on the negative impact of protective trade policies were exaggerated. Trade protective policies showed positive composite long-term effects on increasing film productions, market share, box office revenues, and film screens over the studied years. They also had short-term contributions to increase film import diversity. The largest negative impact of trade protections was on export, but the impact was for a short-term only.

Individually, quota was the most beneficial variable that showed significant contribution on eight film performance indicators. Subsidy was another contributing factor, but it was also most affected by time. Investment restrictions showed sustaining negative effects on consumer spending and admissions. The main negative impact of service restrictions was on film export. Taxation reduced audience spending. Tariff played double roles in increasing film admission and screens, but reduced consumer spending and import diversity.

Overall, increasing the quality of trade protections mattered. Because economic development played the single most important role in determining national film performances, for countries with less developed national economies or unfavorable cultures for competing in current market environments, qualitative trade protections might help in promoting domestic production and market share. Depending on the combination of different protective methods, regulatory trade policies can play an important role toward benefiting the local film industry.