Cultural Preferences in International Trade: Evidence from the Globalization of Korean Pop Culture

Korean pop culture (soap operas and K-pop music) has grown immensely popular across the globe over the past 15 years. This paper analyzes its impacts on international trade. We compile cross-country panel data on South Korea’s TV show exports to 136 countries for the period 2001– 2014. These data, when combined with Korea’s exports of goods (HS 4-digit level), exhibit large variations across years, countries, and products. We demonstrate that more exposure to Korean culture increases foreign consumers’ demand for Korean goods, and the effect differs across types of products. First, given the fact that women spend more time consuming Korean soap operas and music, we show that higher Korean TV show exports significantly increase female visitors to Korea and its exports of women’s clothing and cosmetics, while the effects are smaller on male visitors and men’s clothing. This provides strong evidence for the demand-side preference mechanism, because supply-side factors can hardly generate such gender bias within the same product category. Furthermore, we find that Korean TV show exports have significantly positive effects on consumer goods, but no effects on capital or intermediate goods. Together, these findings highlight the role of cultural flows on consumer preferences in international trade.