The Korean film industry has expanded rapidly since the late 1990s, largely because of the success of blockbusters. It is worth examining a plausible theory to explain the important factors in the development of Korean blockbusters and the film industry as a whole. Therefore, the purpose of this study is to analyze the development of the Korean film industry according to institutional theory, based on three mechanisms—regulatory/coercive, normative, and mimetic/cognitive. Results show that institutionalization was implemented through the screen quota (regulatory/coercive), the norm that cultural industries must be developed (normative), and the notion that Korean blockbusters ought to mimic those of Hollywood (mimetic/cognitive).
Moreover, this study recognizes aspects of the blockbuster industry that have not been completely institutionalized, such as illegal downloads, inactive One Source Multi Use, and oligopolistic industry structure. Finally, it provides an empirical analysis that shows the change caused by the regulatory mechanism of Screen Quota in the Korean film industry.