The effect of Hallyu on tourism in Korea

Abstract

The purposes of the study are to estimate inbound tourism demand and to analyze the effect of the Korean Wave and Economic indicators on it. For these purposes, we examined the influence of Korean Wave, GDP, CPI and exchange rate on inbound tourism demand for foreign tourists from the USA, China, Japan and Hong Kong to Korea. In order to measure the Korean wave, the export amount of Hallyu related contents exported to each of the four countries is used. GDP means the GDP of each of the four countries. However, the CPI and the exchange rate are relative to Korea. Penal data on tourism demand, Korean Wave, and Economic indicators from 1997 to 2014 are collected for analysis. Through the various tests for panel analysis model selection, the best fit model proved to be a random effect model. As a result, Korean Wave, GDP, and exchange rate have a statistically significant impact on tourism demand. Therefore, it can be seen that the Korean Wave is one of the important factors for attracting foreign tourists to Korea in four countries. Also, the results show that overseas tourism increases when the economic income of the country is high and the exchange rate is favorable. However, CPI does not appear to have a statistically significant impact on tourism demand. This indicates that tourists are not overly concerned about the cost of the travel country when planning a trip.