## 1 Introduction  
Innovation is considered as an important factor for creating and sustaining competitive advantage in an industry [1, 2]. Two key theories in the field of strategic management help explain the drivers for innovation of firms competing in the industry. The first is the industry-based view (IBV) rooted in industrial organization (IO) economics, which emphasizes the determinant role of environmental factors on firm innovation and performance. [PERSON]'s analytical frameworks such as the five-forces model [3] have contributed to this perspective in particular. From the 1980s, however, despite the popularity of IBV, it was challenged by the resource-based view (RBV) and extended theories such as knowledge-based view and dynamic capabilities. These alternative views argue that the IBV neglects the effects of internal resources and capabilities among firms that have led to the heterogeneity of firms and their industrial performance. Despite the contradictory but complementary approaches between the two mainstream theories with regard to competitive advantage, they commonly stress the importance of resource superiority that support firm innovation and sustainable performance [4]. However, these approaches are limited at explaining the success of latecomers because they do not have enough resources for R&D in the initial development stage. The external industrial environment that facilitates firm innovation emphasizes the importance of access to advanced factor conditions such as technology and skilled labors, sophisticated market, and competitive suppliers. However, these factors are often insufficient or underdeveloped in developing countries. Hence, both theories cannot satisfactorily explain the diverse sources of competitive advantages of firms or industries from developing countries. To clarify the fundamental sources of competitive advantage of the industries in emerging countries, this paper analyzes and compares the success of the film industry in two developing countries--India and Korea. Despite the dominance of the United States (US) in the global film industry, film markets in the Asian region have been expanding and have brought about a significant increase in its share of the global film market thanks to its increasing living standards [5]. The four main countries in the region--China, Japan, Korea, and India--account for a dominant share of the Asian film market, and they are among the top ten largest film markets in the world. India has had a longstanding reputation for its film industry. Although it has suffered in recent years from the decline in both domestic demand for films and its share in the global film market, it remains the largest producer of films in the world--about three times the size of Hollywood's production [6,7]. \"Bollywood,\" based in Mumbai, in particular, has a large and successful profile around the world. Ref. [8] pointed out that \"Bollywood has increasingly emerged as a significant competitor of Hollywood in the size and enthusiasm of its audiences\". On the other hand, Korean films in recent years, such as [PERSON]'s Parasite (2019), have achieved great success at international film festivals and academy awards, for example. In particular, Netflix's original series Squid Game (2021) has set another milestone as the streaming site's most popular TV show [9]. The Wall Street Journal stated that such success has secured Korea's reputation for making high-quality shows on tight budgets as noted in an Arirang News article on 29 December 2021 [10]. Although distant from Hollywood in terms of gross revenue, films from India and Korea have managed to outperform many Hollywood blockbusters, and have generated substantial influence in the global film market. As this has only been a recent development, India's Bollywood and Korea's film industry have attracted the attention of mainstream academics. However, there has been a lack of serious research in this field, and a systematic analysis of the industrial competitiveness [6,11].