The Impact of Youtube on International Trade

Many researchers in the field of international business have argued that cultural proximity can positively influence bilateral trade. These researchers have attempted to develop proxy measures for cultural proximity, such as language, ethnicity, religion, and trade of cultural goods. However, the conventional measures failed to capture the time-variant characteristics of cultural affinity or digitization in international trade. As an alternative approach, in this study, we focused on cultural affinity in social media like YouTube. Based on the recent popularity of Korean pop (K-pop) on YouTube, we hypothesized that online consumption of K-pop content creates an affinity for Korea as a country, resulting in higher Korean exports. We used panel data analysis for YouTube comments on K-pop music videos that were published from the second quarter of 2009 to the third quarter of 2012; these comments were segregated on the basis of the users’ home countries. We found that the YouTube comments of each country in the current and previous quarters are significant predictors of Korea’s total exports and exports of consumer goods such as processed food, clothes, and cosmetics to that particular country.