| Abstract [eng] |
The Master thesis examines the strategic potential of the film industry to drive economic growth in Lithuania, with a specific focus on evaluating the effectiveness of the fiscal tax incentive for film production introduced in 2014. In the context of the global shift towards the "new economy," Cultural and Creative Industries (CCIs) are recognized by the European Union as vital engines for innovation and sustainable development. The thesis addresses a critical scientific problem: while descriptive statistics indicate a revival in the Lithuanian film sector, there is a lack of rigorous econometric analysis to establish a causal link between the state’s tax incentives and this growth. The aim of the thesis is to fill this research gap by offering a causality assessment regarding the impact of the Lithuanian tax incentive. The methods deployed include Leontief Input-Output analysis to calculate sectorial multipliers and econometric designs: Interrupted Time Series (ITS), Two Way Fixed Effects Difference-in-Differences (TWFE DiD), and the Synthetic Control Method (SCM), processed using RStudio. The empirical results provide robust evidence of the policy's effectiveness while highlighting structural limitations. The Input-Output analysis indicates that while the industry strongly supports real estate and advertising, it lacks the theoretical spillover into tourism and hospitality observed in mature markets, suggesting the sector has not yet reached its full economic potential. Econometrically, the ITS model detects a statistically significant positive structural break in production volume immediately following the 2014 intervention. The TWFE DiD analysis isolates a causal average treatment effect of 14,7% in Gross Value Added (GVA) compared to regional trends. However, the Synthetic Control Method yields a more conservative impact estimate of 7,5%, implying that regional competitors (specifically Estonia) are closely trailing Lithuania’s performance. Based on these findings, the thesis concludes that the tax incentive successfully accelerated Lithuania's convergence with European competitors. However, as such incentives are now standard across the EU, the policy has become a baseline requirement rather than a unique differentiator. The author recommends that policymakers retain the incentive as a hygiene factor but recognize that relying solely on price competitiveness is insufficient. Future strategy must focus on wider structural support and address the market shifts driven by global streaming platforms (e.g., Netflix), which have fundamentally altered the demand for local content. |
