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Seminarios académicos y conferencias

Gabriel Natividad, Universidad de Piura

Political Affinity, Release Strategy, and Performance

Coautor: Luis Cabral, New York University

29 Agosto 2017 - 17:00hrs

Sala 209, Facultad de Ciencias Económicas y Administrativas UC

Abstract: We examine the release strategy and performance of movies produced in country
i and exhibited in country j. Our theoretical model implies that cultural proximity and
demand potential are substitute factors in the movie-release decision: the closer countries
i and j are the more likely i’s movies are released in j during a period of low demand.
Moreover, everything else constant cultural proximity leads to better performance.
We test our predictions with a data set comprising 10,585 feature films produced in 84
different countries and distributed in 59 different countries. As a country distance variable,
we use a well-known measure of political affinity which is subject to yearly exogenous shocks.
The empirical results confirm the theory with regression coefficients that are both sta-
tistically and economically significant: a unit change in the affinity variable (e.g., from un-
correlated to perfectly aligned political preferences) leads to a 31.7% increase in box-office
revenues (or $5.6 million per movie) and a 7.9% decrease in the probability of releasing the
film on a high-grossing weekend.