Review disagreements, cultural capital, and cultural discount on imported hollywood movies in China

Within the context of mounting competition faced by Hollywood movies in the global cinema market, particularly in emerging markets, this paper examines the influence of review disagreements and cultural capital on the cultural discount of imported Hollywood blockbusters in China's movie market. Using a dataset of 652 movies from the U.S. spanning 1994-2019, we find that review disagreements between U.S. and Chinese consumers exacerbate the cultural discount on imported Hollywood movies in China. However, cultural capital, measured by the accumulated revenue of specific imported movie genres in China, effectively mitigates this discount. We also observe a reduction in the discount for movie genres with fewer language barriers. Accounting for endogeneity due to reverse causality and selection bias, we identify a significant structural break in 2012. In the post-2012 era, collaboration involving China's censorship, quota rules, and film-production laws has improved the market mechanism and cultural capital accumulation, enhancing the performance of imported Hollywood movies in China. Minority movies, characterized by being less mainstream and commercial, are more sensitive to review disagreements, while cultural capital plays a greater role in mitigating the discount for mainstream Hollywood movies. These findings have significant implications for professionals involved in the distribution and screening of Hollywood movies in China.