Cultural preferences in international trade: Evidence from the globalization of Korean pop culture

• Main Authors: CHANG, Pao-Li, LEE, Iona Hyojung
• Format: text
• Language: English
• Published: Institutional Knowledge at Singapore Management University 2017
• Subjects: International Trade; Gravity Equation; Cultural Preferences; Korean Wave; Asian Studies; International Business; International Economics
• Online Access: https://ink.library.smu.edu.sg/soe_research/2142; https://ink.library.smu.edu.sg/context/soe_research/article/3142/viewcontent/Kwave_.pdf
• Institution: Singapore Management University

The Korean pop culture (TVdramas and K-pop music) has grown immensely popular across the globe over thepast two decades. This paper analyzes its impacts on international trade. We compilea cross-country panel dataset of South Korea's TV show exports to over 150countries for the period of 1998{2014. These variations in exposure to Koreanpop cultures are used to identify changes in consumer preferences for Koreanmerchandise across time, countries, and products (at the HS 4-digit level).First, we find that more Korean TV show exports significantly increase Koreanexports of goods for women, while the effects are much smaller on men'smerchandise. This strongly supports the demand-side preference mechanism, becausesupply-side factors can hardly generate such gender bias within the sameproduct category. Second, we find that the TV show effect is much stronger forconsumer goods than capital or intermediate goods. Third, we show that thereexist significant and positive effects even for goods that are not activelyadvertised. Together, these findings shed light on the importance of culturalpreferences in trade flows.