AbstractsEconomics

This thesis analyses historical development of the interactive relationship between firms’ activities and their environment in the Korean music industry since the 1960s. It argues that the current uprise of Korea’s cultural industries in the world market is the result of the historical interaction between firms’ activities and the environment. Prior to the early 1990s, the authoritarian government politically mobilised the activities of firms in the Korean music industry to achieve its economic objective, that is, rapid industrialisation of the Korean economy. Activities of firms in the music industry which fell outside the government’s political and economic agenda were strictly regulated and suppressed. On the other hand, those firms which adhered to the government’s political control, thereby promoted by the government, laid the foundation for the future development of the Korean music industry. Coming into the 1990s, the inauguration of democratic ruling of the government and increased music product consumption by more affluent youth consumers permitted firms in the music industry to more confidently pursue commercial gains. More importantly, there was a crucial paradigm shift in the government’s cultural industry policy, from regulation to promotion. The government revised its economic development policy and placed the information and communications technologies (ICT) at the core of its economic development strategies. Within the new economic development framework, the government also selected cultural industries including the music industry as one of key sectors for promotion for the increasingly digitalised national economy. In a highly digitalised environment, the market for digital music products expanded while a more conventional physical music record market collapsed. During this period, firms specialising in production of competitive market-oriented music products, musician management companies (MMCs), became the key driving force behind the development of the domestic music product market and these firms began to make entries into the world market. Since the early 2000s, the government provided more effective industrial policy to boost the global expansion of Korean music, K-pop, produced by MMCs. MMCs have made substantial global inroads and K-pop has emerged as one of major music genres in the world market. Theories on firm-environment relationship from the schools of business studies and social science studies were applied to the case of the Korean music industry. The thesis demonstrates that each theory has its own strengths and weaknesses. Therefore, it suggests that the theories need to be integrated flexibly to account for the relationship between the activities of firms and environment in order to explain the development of Korea’s cultural industries more comprehensively.