Star power as quality signal or marketing effect? A path analysis on China's motion‐picture industry

Lili Kang and Fei Peng

International Journal of Finance & Economics, 2024, vol. 29, issue 3, 3639-3655

Abstract: This study investigates the relationship between star power, artistic excellence, and the commercial success of Chinese movies from 2009 to 2018 based on a two‐path structural model. Artistic excellence was measured based on industry recognition; more specifically, the winners of seven major movie awards in the greater China region, which reflect the critical and popular evaluations of reviewers and consumers. The commercial success was measured by box office performance and the level of buzz among the audience. While the paths of artistic excellence and commercial movie success are essentially separable, as well as conceptually and empirically distinct, movie star power may influence both. Our findings indicate that star power had negative signal effects on critical and popular evaluation as well as industry recognition, but positive marketing effects on critical and popular buzz as well as box office performance. Indeed, star power has indirect positive effects that can outweigh its negative effects. Thus, star power is the key to success in these two seemingly unrelated paths in China. Moreover, these findings have several implications for international investors, producers, actors, and directors who are participating in the Chinese motion picture industry.

Date: 2024
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