Learning from Competitors: Evidence from the Movie Industry

As an entertainment medium, movies are closely related to everyone's daily life. Using film industry data can help understanding how a country's industry develops and progresses. It is widely seen in many contexts that companies can learn from competitors to improve quality and adopt technology. This project uses detailed film production data to understand the upgrading process of China's film industry over the past decade. The study finds that foreign filmmakers produce significantly more feature films. Feature films are a special type of film that are more technical and require large visual teams. It finds that foreign films have more visual team members than domestic ones. It shows that domestic film productions catch up by hiring foreign visual team members. It is illustrated that how strategically hiring foreign experts promotes domestic industry upgrading and technological knowledge transfer. Film industry data provide unique insights into these human resource channels to narrow the capability gap between domestic and foreign producers. These results provide insights into the channels behind industry upgrading.