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Star Turnover and the Value of Human Capital—Evidence from Broadway Shows

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  • Shu Han

    (Sy Syms School of Business, Yeshiva University, New York, New York 10033;)

  • S. Abraham Ravid

    (Sy Syms School of Business, Yeshiva University, New York, New York 10033; Knut Wicksell Center for Financial Studies, Lund University, Lund, Sweden SE-221 00)

Abstract

Theater shows routinely turn over actors in lead roles. Otherwise, the show stays the same, including the director, the script, other actors and, the physical theater environment. Even the lines performed do not change the set. Therefore, the theater provides a unique laboratory for assessing the value of human capital to an enterprise, a question that has been studied in other contexts, including the CEO value literature. We compare revenues, capacity, and ticket prices just before and just after transitions of top cast members. We also characterize the performers in various ways and control for the attributes of the show and for team characteristics. We find that decorated theater stars significantly affect the financial success of theater shows, supporting the MacDonald version of the superstar hypothesis. Movie stars and celebrities do not seem to affect ticket prices or show revenues. Teams and seasonal effects seem to matter as well.

Suggested Citation

  • Shu Han & S. Abraham Ravid, 2020. "Star Turnover and the Value of Human Capital—Evidence from Broadway Shows," Management Science, INFORMS, vol. 66(2), pages 958-978, February.
    • Handle: RePEc:inm:ormnsc:v:66:y:2020:i:2:p:958-978
    DOI: 10.1287/mnsc.2018.3177
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    2. Kyle D. S. Maclean & Fredrik Ødegaard, 2023. "Revenue implications of celebrities on Broadway theatre," Journal of Revenue and Pricing Management, Palgrave Macmillan, vol. 22(3), pages 207-218, June.
    3. Jordi McKenzie, 2023. "The economics of movies (revisited): A survey of recent literature," Journal of Economic Surveys, Wiley Blackwell, vol. 37(2), pages 480-525, April.
    4. Federico Caviggioli & Boris Forthmann, 2022. "Reach for the stars: disentangling quantity and quality of inventors’ productivity in a multifaceted latent variable model," Scientometrics, Springer;Akadémiai Kiadó, vol. 127(12), pages 7015-7040, December.
    5. Dharmani, Pranav & Das, Satyasiba & Prashar, Sanjeev, 2021. "A bibliometric analysis of creative industries: Current trends and future directions," Journal of Business Research, Elsevier, vol. 135(C), pages 252-267.
    6. Khanna, Rajat, 2023. "Passing the torch of knowledge: Star death, collaborative ties, and knowledge creation," Research Policy, Elsevier, vol. 52(1).
    7. Verena Komander & Andreas König, 2024. "Organizations on stage: organizational research and the performing arts," Management Review Quarterly, Springer, vol. 74(1), pages 303-352, February.
    8. Grove, Wayne A. & Jetter, Michael & Papps, Kerry L., 2021. "Career lotto? Labor supply in a superstar market," Journal of Economic Behavior & Organization, Elsevier, vol. 183(C), pages 362-376.

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