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Does file-sharing reduce DVD sales?

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Abstract

The short-term effect of BitTorrent file-sharing on movie DVD sales is estimated using sales data on newly released DVDs and torrent file downloads during a 13-week period between March and May 2009 in the USA. To overcome endogeneity between downloads and sales, the analysis is carried out in a dynamic panel setting. After controlling for an autoregressive component and a declining time trend in sales, the file-sharing elasticity of sales is not statistically different from zero in the difference GMM estimations. The results hold when external instruments are used. Moreover, the results suggest an upper bound of −0.21 of elasticity, indicating that the short-term sales displacement effect is moderate at worst.

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  1. Turku School of Economics at the University of Turku, Department of Economics, University of Turku, 20014, Turku, Finland

    Emmi Martikainen

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  1. Emmi Martikainen
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Martikainen, E. Does file-sharing reduce DVD sales?. Netnomics 15, 9–31 (2014). https://doi.org/10.1007/s11066-014-9085-0

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