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The decline and fall of the European film industry: sunk costs, market size and market structure, 1890-1927

Gerben Bakker

Economic History Working Papers from London School of Economics and Political Science, Department of Economic History

Abstract: In the 1900s, the European film industry exported throughout the world, at times supplying half the US market. By 1920, however, European films had virtually disappeared from America, and had become marginal in Europe. Theory on sunk costs and market structure suggests that an escalation of sunk costs during a rapid US growth phase resulted in increased concentration; eight surviving companies dominated international film production and distribution forever after. European film companies, although overall profitable, could not take part, and after the war could not catch up. US, British and French time series data for 1890-1930 support the theory.

JEL-codes: N0 O52 R14 J01 B1 L82 (search for similar items in EconPapers)
Date: 2003-02
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