Is Globalization A Threat to Cultural Diversity? Measuring Home Bias in International Film Trade

Abstract

In today's rapidly expanding international economy, free trade agreements have stoked concerns that globalization menaces cultural diversity around the world. Using a novel dataset and an application of the gravity equation, I first characterize the international film industry, presenting the impact of a number of variables on gross trade. Then, to address the question of cultural homogenization, I analyze in particular worldwide home bias", which is the preference for domestic films over foreign ones, all else equal, to see how individual cultural values are prevailing under the pressure of Americanization and other similar influences. My results indicate that home bias in film is large in real-world terms and does not seem to have diminished in the past decade. This result is shown to be robust across a number of specifications controlling for composition effects and sample selection bias.