Exporting the Korean Wave to Europe: An Analysis of the Trade Effect

Abstract

The growing global popularity of South Korea’s culture, known as the Korean Wave, has contributed to the country’s economic growth by increasing not only the exports of its cultural goods but also pulling other types of exports. Using the theory of dynamic cultural proximity in international trade, this paper shows empirically that South Korea’s cultural exports multiply the exports of its consumption goods to Europe where traditional cultural ties with Korea are weak. Examining the panel data of four decades disentangles the positive effect of the country’s cultural exports that concurs with the emergence and advancement of the Korean Wave. This finding highlights the role of South Korea’s cultural exports in stimulating European consumers’ preferences for products ‘made in Korea’.