The Field of Miracles: A TCE and GWCs Approach to the Film Industry

Abstract

The Film Industry has always been characterised by incredibly high costs and low margin of profits. In the years, production companies not only have started diversifying their purpose becoming fullfledged entertainment conglomerates, but also begun to structure their financing and intellectual property operations in a way to lower transaction costs and take advantage of tax favourable regimes. This thesis investigates under what circumstances production companies choose to organize their operations across multiple legal jurisdictions. The research question was investigated at two levels: a macro level regarding Hollywood entertainment conglomerates, which was the main study of this thesis; and a micro one studying the Danish and the Italian film industries. By analysing the issue through TCE and GWCs, and through the use of quantitative (Network Analysis) and qualitative (Interviews) methods, the thesis highlights the importance of the institutional role and the scale of the industry. From the two case studies, two main findings were identified: (I) Hollywood entertainment conglomerates take advantage of their intellectual property operations to exploit GWCs and reduce transaction costs; (II) Danish and Italian production companies operate in countries with low transaction costs deriving from uncertainty, frequency, and information asymmetry.