A Study on the Impact of Hallyu (Korean Wave) on Korea’s Consumer Goods Exports to China: Panel Analysis Using Big Data and Provincial-Level Data

Abstract

This study empirically analyzes how the Hallyu (Korean Wave) phenomenon affects Korea’s consumer goods exports to China using Chinese provincial-level panel data covering the period from 2011 to 2020. This paper adopts Baidu Index big data with the keywords “Korean drama”, “Korean movie”, “Korean music”, and “Korean entertainment” as proxy variables for Hallyu. The paper investigates the impact of Hallyu on Korean consumer goods exports by subdividing consumer goods into seven processing steps. In addition to the effect of the composite Hallyu index, the effect of each Hallyu content is also examined. Moreover, this study also investigates the impact of the political issue of the deployment of the THAAD American anti-ballistic missile defense system by dividing the period from 2011 to 2020 into before and after 2016. An export equation that includes income level, the Hallyu index, as well as other variables recognized as factors affecting Korea’s exports in existing studies, is used. Several interesting conclusions have been reached. First, Hallyu in China has a significant impact on Korea’s exports of non-durable consumer goods and processed household food and beverages to China. Second, the political issue of the deployment of THAAD has a negative impact on Korea’s exports of consumer goods to China. Third, among the four types of Hallyu content, dramas, as the most popular content in China, have the greatest influence on Korea’s exports of consumer goods to China.