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Government Allocation of Import Quota Slots to US Films in China’s Cinematic Movie Market

By Sabrina McCutchan

The Chinese government implements a complex regulatory system to decrease the market share of imported Hollywood films for theatrical release. The import quota, censorship, and competitive release-scheduling policies in particular severely limit Hollywood’s access to the Chinese market. However, because the government has a monopoly on film distribution and receives nearly half of all box office receipts from Hollywood films, I expect that the profit incentive is comparatively more important than protectionist motives in the decision to import a Hollywood film or grant it a revenue-sharing quota slot. This paper’s findings support this hypothesis. Using a probit model, I find that three strong predictors of Chinese box office, namely US box office, Hong Kong box office, and the action genre, positively predict entry to the Chinese market and the allocation of a revenue-sharing quota slot for US-movies released in 2012.

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Advisor: Edward Tower | JEL Codes: F14, F19 | Tagged: China, Hollywood, Motion Pictures, Protectionism, Quota

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