Journal of Industry, Competition and Trade

, Volume 10, Issue 2, pp 135–150

Vertical Integration in the Japanese Movie Industry

Article

Abstract

This study examines vertical integration in the Japanese movie industry. I estimate an admission price equation, and a moviegoing demand equation derived from a discrete choice model of product differentiation. In order to overcome identification problems, this study exploits a panel structure dataset. My results show that the price of vertically integrated theaters tends to be higher than nonintegrated theaters, but it appears to be due to the inherent high quality of vertically integrated theaters. On the other hand, vertically integrated theaters are more popular among consumers and have higher attendance than nonintegrated theaters. Even after controlling the theater fixed effects, attendance for vertically integrated theaters is still larger than nonintegrated theaters. That is, the integration of producers/distributors and theaters is likely to be a source of economic efficiency. Policy implications are also proposed.

Keywords

vertical integration movie theater discrete choice model competition policy 

JEL Classification

L42 L22 L82 

Copyright information

© Springer Science+Business Media, LLC 2009

Authors and Affiliations

  1. 1.Competition Policy Research CenterJapan Fair Trade CommissionChiyoda-kuJapan

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