Abstract
This study attempts to answer two questions. First, can a single cultural event impact the stock prices of a wide range of companies and sectors? Second, was the positive stock market response in the information technology (IT) sector as well as performing arts sector significant? To answer these questions, we examine whether a hit pop single, “Gangnam Style” by Park Jae-Sang in 2012, affected related sectors of the Korean stock market and whether market reactions went beyond the stock price of the singer’s agency to affect those of other firms. We use an event study approach. The results show two notable empirical findings. First, although the findings indicating abnormal returns and cumulative abnormal returns appear mixed, the overall results imply that the unprecedented worldwide hit single by the South Korean singer positively affected the Recreation & Culture and Digital Content sectors. In other words, the market interpreted the event as good news, with shareholders expecting positive effects on the related sectors. Second, a positive stock market response was observed in the IT sector as well.
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Notes
The producers of Gangnam Style waived their exclusive rights to the song and allowed the mass production of parodies. The song’s proliferation can be largely attributed to not only online distribution channels, such as Twitter, Facebook, and YouTube, but also various derivative videos, such as parodies, flash mobs, and cover dances. Thus, the absence of copyright encouraged people to create their own online parodies, or, in essence, their own “XYZ Style.”
One can confirm the record in YouTube views from PSY to GANGNAM STYLE M/V. https://www.youtube.com/watch?v=9bZkp7q19f0.
Chinese journalists coined the term “Korean wave” to refer to the significant increase in global popularity of South Korean entertainment and culture since the late 1990s. This increase was reported in regions such as the Middle East and Eastern Europe and parts of South America, China, and Japan.
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Jin, H.J., Kim, JC. Effects of the “Gangnam Style Syndrome” on the South Korean stock market. J Cult Econ 42, 139–161 (2018). https://doi.org/10.1007/s10824-017-9291-3
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DOI: https://doi.org/10.1007/s10824-017-9291-3