A Handbook of Cultural Economics, Second Edition
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A Handbook of Cultural Economics, Second Edition

Edited by Ruth Towse

The second edition of this widely acclaimed and extensively cited collection of original contributions by specialist authors reflects changes in the field of cultural economics over the last eight years. Thoroughly revised chapters alongside new topics and contributors bring the Handbook up to date, taking into account new research, literature and the impact of new technologies in the creative industries.
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Chapter 33: International Trade

Günther G. Schulze


Günther G. Schulze The market for cultural goods is arguably one of the most internationalized – Van Gogh’s paintings can be admired in New York, a large collection of Egyptian art is on display in Berlin, Isabel Allende’s and Thomas Mann’s books are popular in Europe and the Americas alike, the Beatles’ and Madonna’s CDs are sold throughout the world, and Hollywood movies have global coverage. Yet this phenomenon is not uniform: the market share of American films in Europe is much higher than that of European films in the USA and it’s fair to say that Pop Art had a larger influence on the European culture than traditional Javanese paintings. Why is that? What determines the pattern of trade in cultural goods? Trade theory explains why sellers (mostly producers) of certain goods reside in different jurisdictions from the buyers/consumers of these products. In order to understand the trade pattern we need to know what determines the demand for foreign art and its supply, that is, what determines consumption for foreign art and under which conditions are the respective cultural goods produced. In both dimensions cultural goods are distinctively different from most other goods.1 The demand for cultural goods in the international market The demand for cultural goods is characterized by the positive addiction in consumption of cultural goods. The idea goes back to Alfred Marshall, who wrote: ‘It is therefore no exception to the law [of diminishing marginal utility] that the more good music a man hears, the stronger...

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