“Make-or-buy” in movies: Integration and ex-post renegotiation

In this paper, I investigate the determinants of the boundaries of the firm in the movie industry using a new data set from the Spanish movie industry. These data document movie contractual renegotiation and allow me to construct a direct measure of contractual complexity for each movie. Linking this measure to the movie ownership structure, I find that movies renegotiated ex-post more often are more likely to be distributed ex-ante by integrated distributors and more likely to show in distributor-owned theaters. This is consistent with transaction cost economics theories of integration.