The Economic Effect of Hallyu Content on K-Beauty Exports: Focusing on the Asia-Pacific Region

Purpose - The purpose of this study is to empirically analyze the economic effect of Hallyu (Korean Wave) content on K-beauty exports, focusing on the Asia-Pacific region. It seeks to quantify the influence of Hallyu content on K-beauty exports and derive policy implications for the industry's sustainable growth. Design/methodology/approach - This study applied an augmented gravity model using panel data from 2010 to 2023 for 14 major export destination countries. The model incorporates Hallyu content export value (proxied by broadcasting program export value) alongside traditional trade determinants: economic distance (per capita GDP difference), geographical distance, exchange rate, and FTA. Findings - Hallyu content exports were found to have a positive and highly significant effect on K-beauty exports, with a 1% increase in Hallyu exports leading to an approximately 0.27% increase in K-beauty exports. The exchange rate (Won depreciation) was also highly positive and significant. Interestingly, both economic distance and geographical distance were found to be statistically insignificant, suggesting diminished traditional trade barriers. Research implications or Originality - The findings imply that Hallyu content acts as a crucial economic driver, not just a cultural phenomenon, by generating favorable consumer perception. The originality lies in the finding that for the K-beauty industry, traditional barriers like economic and geographical distance are mitigated by non-price competitiveness factors, such as innovativeness and online distribution. This offers novel strategic implications, highlighting the importance of the continuous strategic utilization of Hallyu content and the optimization of online D2C platforms related to K-beauty exports.