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• W436487522 abstract "This paper empirically documents signicant eects of past experiences on current purchases and investigates sources of persistence in brand preferences. We use a rare natural experiment in the Korean soju industry, in which the government abolished a regulation that designated only one rm for each regional market and further obliged consumers in each market to purchase local brands. We nd that consumers tend to purchase local brands even after the regulation was removed. To explain the persistent leadership of local rms in their respective markets, we propose an identity-based story, which implies that (i) the designated local company is expected to have the highest market share in its local market, (ii) migrants to other regions tend to consume products produced by the designated local company in their region of origin, and (iii) any exogenous event that triggers higher costs of local identity should lead to a higher market share by the designated local company in its local market. In particular, we consider regionalism in Korean politics, and use presidential election results as events that might trigger higher identity costs. We nd empirical evidence consistent with these three theoretical predictions, which is robust to several alternative specications. We further nd that various other potential mechanisms are not fully consistent with our data, suggesting that local identity, once established, can be an important source to explain the geographic variations in market shares." @default.
• W436487522 created "2016-06-24" @default.
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• W436487522 date "2013-01-01" @default.
• W436487522 modified "2023-09-23" @default.
• W436487522 title "Local identity and persistent leadership in market share dynamics: Evidence from deregulation in the Korean soju industry" @default.
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