Trade Liberalization and Policy for Media Industries: A Theoretical Examination of Media Flows

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Abstract
The recently developed microeconomic model of one-way international flows in films and television programs is shown to be a specific application of a more general model of trade in media products. Predictions of the general model are consistent with observed international flows for other media, geographic flows of media products within countries, and intertemporal flows of media products across distribution channels. The general tendency is for product to flow from large to small markets unless impeded by policy-created barriers. Earlier explanations for one-way international flows do not similarly generalize, but cultural explanations and the microeconomic model are complementary to each other. The role of market size in determining media trade flows and the effect of domestic media policies on the growth and relative sizes of national media markets should be considered in the formation of trade policies for media industries.