Western Economic Association International
The global success of American film industry facing rising costs of production, foreign protectionism, and liberal trade policies at home is an enigma. The basis for American dominance is found in market size and structure. In turn, market characteristics and micro data explain protectionist strategies leading to a complex gravity-iceberg model of U.S. exports. Besides purchasing power and spatial distance, cultural variables as well as protectionist strategies are important influences on U S. motion pictures trade, competitors nonetheless fail to match the magical American combination of movie stars, economies of scale, and popularity of English speech.