How social influence affects consumption trends in emerging markets: An empirical investigation of the consumption convergence hypothesis



The authors empirically test the veracity of the consumption convergence hypothesis for emerging markets (EMs): the hypothesis that through social influences on individual consumers resulting from global integration, and exposure to the United States (U.S.), consumption levels in EMs converge toward U.S. consumption levels. Drawing upon psychological theories of social influence, and using national per capita consumption data from 22 major EMs and the U.S., the authors find strong empirical support for consumption convergence for both, the aggregate consumption level of EMs, as well as for soft-drink consumption therein. After controlling for income and price levels, the results show that global integration and exposure to the U.S. each increase the EM's consumption convergence. The authors also find that degree of global integration interacts with specific exposure to the U.S., accelerating consumption convergence of EMs. Theoretical and practical implications of the results are considered, and future research opportunities are discussed. © 2004 Wiley Periodicals, Inc.