New Directions in Economics

Crowley, M. A., Han, L., Son, M.

Using administrative transactions data from the United Kingdom, we document a swift decline in sterling use among British exporters after the 2016 Brexit vote. Through a novel decomposition, we document most of this decline comes from two sources: (i) continuously-operating firms switching from sterling to dollars or local currencies and (ii) reductions in transactions for sterling-loyal firms. In contrast, new entrants into exporting primarily invoice in sterling before and after the Brexit vote. Our findings provide the first evidence on the quantitative relevance of new channels that contribute to changes in aggregate invoicing shares amidst political upheaval.

Michalopoulos, S.; Rauh, C. 

Why are certain movies more successful in some markets than others? Are the entertainment products we consume reflective of our core values and beliefs? These questions drive our investigation into the relationship between a society’s oral tradition and the financial success of films. We combine a unique catalog of local tales, myths, and legends around the world with data on international movie screenings and revenues. First, we quantify the similarity between movies’ plots and traditional motifs employing machine learning techniques. Comparing the same movie across different markets, we establish that films that resonate more with local folklore systematically accrue higher revenue and are more likely to be screened. Second, we document analogous patterns within the US. Google Trends data reveal a pronounced interest in markets where ancestral narratives align more closely with a movie’s theme. Third, we delve into the explicit values transmitted by films, concentrating on the depiction of risk and gender roles. Films that promote risk-taking sell more in entrepreneurial societies today, rooted in traditions where characters pursue dangerous tasks successfully.