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Protective Trade Policy and Global Film Market PROTECTIVE TRADE POLICY AND GLOBAL FILM MARKET: A CROSS- SECTIONAL ANALYSIS OF REGULATORY TRADE BARRIERS AND THEIR IMPACTS ON THE COMPETITIVE STATUS OF NATIONAL FILM INDUSTRIES 2000-2007 by CUNFANG REN (Under the Direction of Spencer F Tinkham) 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 II 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. INDEX WORDS: Protective Trade Policy, Regulatory Trade Barriers, National Film Industry, Culture Protectionism, Trade, Effect, Effectiveness, Impact III PROTECTIVE TRADE POLICY AND GLOBAL FILM MARKET: A CROSS- SECTIONAL ANALYSIS OF REGULATORY TRADE BARRIERS AND THEIR IMPACTS ON THE COMPETITIVE STATUS OF NATIONAL FILM INDUSTRIES 2000-2007 by CUNFANG REN B.A., Hebei University, Hebei, China, 1993 M.A., Peking University, Beijing, China, 1996 M.M.C., University of Georgia, Georgia, USA, 2004 A Dissertation Submitted to the Graduate Faculty of The University of Georgia in Partial Fulfillment of the Requirements for the Degree DOCTOR OF PHILOSOPHY ATHENS, GEORGIA 2011 IV © 2011 Cunfang Ren All Rights Reserved V PROTECTIVE TRADE POLICY AND GLOBAL FILM MARKET: A CROSS- SECTIONAL ANALYSIS OF REGULATORY TRADE BARRIERS AND THEIR IMPACTS ON THE COMPETITIVE STATUS OF NATIONAL FILM INDUSTRIES 2000-2007 by CUNFANG REN Major Professor: Spencer F. Tinkham Committee: Louise Benjamin Santanu Chatterjee C. Ann Hollifield Electronic Version Approved: Maureen Grasso Dean of the Graduate School The University of Georgia December 2011 iv DEDICATION This dissertation is dedicated to the people whose work adds value and enrichment to the cultural property of human beings. v ACKNOWLEDGEMENTS There are many people for whom I am grateful. My greatest appreciation goes to my committee member, Dr. Spencer Tinkham, Dr. Ann Hollifield, Dr. Luis Benjamin, and Dr. Santanu Chatterjee, for their continuous support during the process of writing my dissertation. Dr. Spencer Tinkham was always available to help me with my research work. Without his continuous support and consultations, this work might never get a chance to complete. Dr. Ann Hollifield has been a role model for me during my program of study. Her combined strategic thinking and active attitude toward research always inspired me. I am also very grateful to Dr. Louis Benjamin who gives me continual support and encouragement. She continued to serve on my committee, even after having left the University of Georgia for several years. I also want to thank my external department committee member, Dr. Santanu Chatterjee, who always offers new perspectives from an economist’s point of view, which is an essential part of this interdisciplinary study. I heartily appreciate all my committee members for the commitment you made to support my dissertation. Special thanks also go to Dr. Hugh Martin, for his advice and guidance during the early stages of the dissertation. His invaluable assistance helped establish a solid foundation for the later work of the dissertation. I would also like to extend my deepest appreciation to Mr. Bernadette Perez, the Executive Assistant of Worldwide Government Policy from the Motion Picture Association of America, who offered full assistance in helping me access the essential vi data for the dissertation. Dr. Steve Wildman from Michigan State University, Dr. Steve Siwek from Economists Incorporated, and Dr. Akbar Marvasti from the University of Southern Mississippi all provided generous guidance for carrying the research. Without this critical assistance, the data gathering process would not have been as smooth as it turned out to be. Thanks to my entire family and friends, who provided emotional support during times of difficulty. At times, when I felt so frustrated that I could not move on, it is my husband who stands by me, giving me the courage to continue. Thanks also to my lovely kids. It is the motive to become a better mother for them that keeps me from giving up mid-way. Thanks also go to my parents and my in-laws. They always hold high expectations for me. My mother-in-law came to the United States several times to support my program of study and my dissertation writing. Without her help, I couldn’t finish the key part of my dissertation. Thanks to all for your love and support. vii TABLE OF CONTENTS Pages ACKNOWLEDGEMENTS................................................................................................ v CHAPTER 1 INTRODUCTION ........................................................................................... 1 Background.............................................................................................. 1 Trade Liberation and Worldwide Hollywood.......................................... 2 The Cultural Protection Movement ......................................................... 4 Statement of Problem............................................................................. 10 Purpose of the Study .............................................................................. 12 Dissertation Organization ...................................................................... 13 2 LITERATURE REVIEW ............................................................................. 15 Overview................................................................................................ 15 Why Do Cultural Industries Matter?...................................................... 15 Two Theoretical Frameworks................................................................ 18 Should Culture Be Protected?................................................................ 34 Effectiveness of Protectionism Policies................................................. 41 Chapter Summary .................................................................................. 54 3 METHODOLOGY ....................................................................................... 56 Overview................................................................................................ 56 Research Questions................................................................................ 56 viii Hypotheses............................................................................................. 58 Defining Variables................................................................................. 62 Model Functions and Statistic Techniques ............................................ 83 Chapter Summary .................................................................................. 83 4 RESULTS .................................................................................................... 85 Overview................................................................................................ 85 Descriptive Statistics.............................................................................. 85 Correlation Analyses.............................................................................. 88 Regression Analyses .............................................................................. 96 Summary of Results............................................................................. 148 5 CONCLUSION AND DISCUSSION ....................................................... 158 Overview.............................................................................................. 158 Effect of Trade Protections on National Film Performances............... 158 The Effectiveness of Trade Protection Methods.................................
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