Does Vertical Integration Enhance Non-Price Efficiency? Evidence from the Movie Theater Industry

In Kyung Kim and Vladyslav Nora
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In Kyung Kim: Nazarbayev University

No 1701, Working Papers from Nazarbayev University, Department of Economics

Abstract: This paper examines how integration between distribution and exhibition in the movie theater industry affects non-price efficiency. We find evidence that integrated theaters may be more efficient than independent ones at picking movies to screen and allocating seats across them. To explain our finding, we provide a model showing that the efficiency increases with a theater chain size, while the effect of vertical integration itself is ambiguous. Comparing efficiency across chains suggests that the effect of vertical integration per se is insignificant, and observed efficiency gains can be attributed to the large size of integrated theater chains

Keywords: vertical integration; efficiency; movie theater industry (search for similar items in EconPapers)
JEL-codes: L13 L22 L82 (search for similar items in EconPapers)
Pages: 38 pages
Date: 2017-01, Revised 2018-02
New Economics Papers: this item is included in nep-com, nep-cul, nep-ind and nep-mkt
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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