The Impact of Subsidies on Film Quality: Empirical Evidence from France, Korea, the United Kingdom, and United States

Abstract

There is a widespread belief that the higher the level of subsidies, the better the performance of film industries (both in quantity and quality). This article focuses on film quality—evaluated by audiences and critics—and scrutinizes this assumption through four selected countries—France, Korea, UK, and US. The main findings of this article are summarized through two points. First, despite the Korean film industry receiving the lowest level of public support, its film quality is higher than that of other selected countries. Second, the impact of subsidies on film quality turns out to be positive for the French, UK, and US films while it is negative or nil for Korean films. Although these results reflect partly differences in the background of each film industry and its public support in the four countries, they suggest that the effectiveness of subsidies and enhancement of film quality can be best achieved by better designing the subsidy schemes—not by increasing their amount.