• Journal of the Korea Academia-Industrial cooperation Society
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• v.15 no.2
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• pp.698-705
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• 2014

R&D investment has rised in recent years. Korea's R&D budget is 43.8 trillion won which is 3.74% adjusted gross domestic product in 2010. Technological advances and technical inovation will bring productivity growth to Firm and Firm's productivity growth will increase GDP in sequence. Therefore the importance of study on the Firm's R&D industry is getting growing. In this study we attempt to analyse the economic impact of the Firm's R&D industry through several years using an inter-industry analysis. Specifically, this study analyze production-inducing effect, value added inducing effect, and employ-inducing effect based on demand-driven model. The analysed results of year from 1995 to 2009, the Firm's R&D investment increases production-inducing effect, value added inducing effect, and employ-inducing effect with the course of time. This means that influence of the Firm's R&D industry has increased.

• Journal of the Korean Academic Society of Industrial Cluster
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• v.1 no.1
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• pp.16-28
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• 2007

This paper analyzes the effects of networking and competition on individual companies' R&D investment, focusing on pharmaceuticals, PCB (Printed Circuit Board), and auto parts sectors. Data were obtained through a survey on firms operating in Seoul, Incheon, and Gyung-gi metropolitan area. The estimation results suggest the networking with other actors in the clusters tends to increase R&D investments of individual firm's. But competition in a cluster tend to reduce individual firm's R&D investment. These results suggest the public policy promoting networking in a cluster could induce private firms' R&D investments and, therefore, should be maintained.

• The Journal of Asian Finance, Economics and Business
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• v.7 no.6
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• pp.379-385
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• 2020

The effect of research and development (R&D) expenditure on firm output is an interesting topic, but hardly explored in developing countries due to the unavailability of data. This study investigates this topic in the context of Vietnam by utilizing a novel dataset of 343 firms listed on the Vietnam Stock Exchange in the 2010-2018 period. The effect of R&D expenditure is examined under the production function framework. In order to obtain the robustness of the quantitative results, we estimate the production function with two coherent techniques including the OLS and 2-SLS. An instrumental variable regression technique is adopted to avoid the endogeneity problem between R&D expenditure and other variables. In our empirical analysis, we find that R&D expenditure has a positive and significant impact on output growth. The finding is robust in both OLS and 2-SLS frameworks. Besides, the output elasticity to R&D expenditure of our result is much higher than the estimated elasticity of other countries. The results imply that a 1% increase in R&D expenditure in Vietnam will help to expand the output more than a 1% increase in R&D investment in other countries. The findings from our paper provide important implications for firm managers, investors, and policymakers in Vietnam.

• Journal of Korea Technology Innovation Society
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• v.10 no.1
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• pp.1-21
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• 2007

Among numerous policy influencers' and researchers' advices and policy suggestions, there is little opposition to the proposition that technology is essential to the economic development. The role of technology has never been more emphasized than today in Korea as in any other countries. The effects of the government's innovation policy on corporate R&D activities and more broadly the economic welfare of a whole nation are widely recognized with intuitional and empirical evidence. That is, various R&D incentives reduce the marginal cost of a firm's R&D efforts, inducing as much increase of its R&D investment to result in a better chance to acquire target technology. This paper examines the impact of R&D incentives on the technological outcomes by analyzing individual firms' investment behaviors subject to the government's R&D incentive policies. An econometric model of technological outcomes is estimated on a project level with cross-sectional data. "Probit model" is employed for estimations. Special attention was given to the effectiveness of R&D programs by estimating policy impact by types of investment. The data were collected from 928 different R&D projects completed between 1987 and 1993. With the single equation approach, we were able to find that the structure of investment is a far more significant factor in technological outcomes than the total amount of investment. The analysis also shows that the two types of firms' matching investment, in-kind and cash, do not bear a complementary, but a substitutive relations to each other. It also reconfirms the proposition that R&D incentives increase firm's financial investment. Despite many supportive studies emphasizing the cooperation between innovation performers, it is also found that the larger the number of institutions involved in a project, the less likely it leads to a technological success, And meeting the proposed deadlines without postponing is estimated to be a good barometer to predict the outcome of an R&D project. Also the probabilities of success for major variables are represented for policy implications, after calculating marginal effects.

• International Area Studies Review
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• v.18 no.3
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• pp.175-201
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• 2014

This paper analyses the effect of R&D investment on local economies. R&D investment contributes to the regional local economy by increasing employment and production activity of the investees. The investees may end up with increased productivity, sales and employment. At the regional R&D level, the central government R&D fund and firm self R&D budget will be the source of R&D investment. Further positive effects are inter-related with local industries. This study carried out an empirical analysis on the effect of R&D investment on local economies using Korean panel data after comparing international literatures. The dynamic panel estimator is used to estimate an autoregressive model with lagged dependent variable. Using the Da Silva method, mixed variance-component moving-average error process is estimated and selected. R&D investment is very important factor to improve the productivity of a region and the size of the effect is dependent on the time periods within the Korean economic history.

• Proceedings of the Technology Innovation Conference
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• 2004.02a
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• pp.202-221
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• 2004

Technology is the most important determination factor on firm`s competitiveness. It helps firms to secure sustainable competitive advantages. Therefore Korean electronics part firms have increased their R&D investment since the 1990s. But their R&D management capabilities seem to be low level. Empirical study was undertook to verify factors that effect on R&D performance with enhancing R&D management capabilities. To accomplish the purpose, data collected valid samples in Seoul and Kyunggi Province. Using SPSSWIN 10.0package, regression analysis was used to verify hypotheses. This study verify that important factors of 4th R&D generation effect on improving R&D performance. Therefore Korean electronics firms must learn advanced firms in developed countries. Based on learning and accumulating R&D management capabilities, Korean electronics part firms should establish their firm-specific R&D management model.

• Asia Marketing Journal
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• v.16 no.4
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• pp.19-37
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• 2015

Forming interfirm collaborative relationships has become a key aspect of a firm's marketing strategies to create value for customers and achieve greater firm performance. While empirical findings are mixed in previous studies, this study is an effort to identify boundary conditions for the benefits of marketing alliances. We investigate internal and environmental factors that may magnify or constrain the effect of marketing alliances on firm profitability. Given the complementary relationship between marketing and R&D activities, we focus on a firm's R&D intensity as an internal factor that may magnify the value of marketing alliances for firm performance. For environmental factors, we focus on industry turbulence and industry competitiveness. Industry turbulence refers to the degree to which industry market conditions change quickly and unpredictably, whereas industry competitiveness refers to the degree to which a firm faces competition in the industry. By testing these factors, we are intended to reveal boundary conditions that determine the value of marketing alliances for firm profitability. The analysis of firms in the diverse industries shows that while the main effect of marketing alliances on firm profitability is not significant, it becomes more positive when R&D investment is more intensive or when industry environment is more turbulent. The results of this study imply that just forming more marketing alliances may not be enough to increase firm profitability. Our findings imply that marketing alliances become more effective in a dynamically changing industry environment. That is, firms can cope with industry uncertainties more effectively by forming marketing alliances. At the same time, the moderating effect of R&D intensity implies that the internal investments in R&D magnify the effect of marketing alliances on firm profitability. The findings of this study contributes to the existing alliance literature in three aspects. First, this study enhances our understanding of the contingent value of marketing alliances by testing both internal and external factors that may influence the effectiveness of marketing alliances. Second, this study responds to the need for research that investigates actual performance resulting from interfirm relationships. Third, while previous studies primarily focused on a specific industry, this study extend previous findings of the boundary conditions for the benefits of marketing alliances in a broader context.

• International Area Studies Review
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• v.21 no.1
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• pp.25-57
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• 2017

In this study, we analyzed the information asymmetry and the agency problem in major affiliated companies on the basis of the R&D investment. As a result of comparing how the R&D investment effects on major affiliated companies and the independent companies, even the achievement of R&D investment effects in a positive way to the firm value, the positive effect appears much lower on major affiliated companies comparing independent companies. In order to analyze the case, we investigated in a separate way according to the shareholding ratio and the affiliated market using the sample of the independent company and the group affiliated company. As a result of such analysis, the cause of this comes from the agency problem in major affiliated company, not the asymmetry information of affiliated company. After we analyzed the sample of the research depending on the affiliation market, we could observe there is a little impact of the asymmetry information in the outcome of the R&D investment of the major affiliated companies. In contrast, the companies which rated lower in the ratio of the shareholding appears much less in the positive effect of R&D investment compared to the companies which rated at a higher level. This phenomenon was also consistently observed when changing the research method or further subdividing the sample of companies belonging to the group based on the ownership share of major shareholders.

• Journal of Korea Technology Innovation Society
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• v.20 no.3
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• pp.546-575
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• 2017

This paper investigates the effects of public R&D support on medium-sized firms' R&D investment. The paper collects a panel dataset of Korean manufacturing firms' R&D investment and public support, and employs the DID (difference-in-differences) regression for the test of stimulating or crowding-out effect. Empirical analysis examines how the effect of public R&D support differs between small and medium-sized firms and whether firm size and technological capability moderate the effect in the sample of medium-sized firms. Empirical results show that public R&D support tends to generally stimulate private pure R&D investment for both small and medium-sized firms. Comparing the results for small and medium-sized firms, this paper finds that the stimulating effect is relatively larger and more significant for medium-sized firms, while the effect is not significant for small ones. Furthermore, the paper shows that the stimulating effect of public R&D subsidy on private R&D investment is relatively stronger for medium-sized firms with superior technological competence and the effect of tax support is greater for incompetent firms. These results suggest that public R&D policies and R&D programs, differentiated from those for existing small firms, are necessary for medium-sized firms to stimulate private R&D continuously and formulated carefully by considering firm size, technological capability and growth potential.

• Asia Pacific Journal of Business Review
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• v.1 no.2
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• pp.37-62
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• 2017

To analyze the effects of R&D expenditure on the firm value of Korean firms, we classified portfolios based on R&D activity levels. After that, we conducted a time-series analysis to assess excess returns from the portfolios. To carry out such an analysis, an empirical analysis of excess returns in the capital market was performed by using the monthly earning rate of stocks from 2000 to 2013. The purpose of this research is to provide basic data on investment to stakeholders in the capital market by analyzing the effects of R&D on the firm value and to overcome scholarly limitations by offering a new model of analysis. The criteria for classifying the portfolios were based on R&D expenditure levels. The analysis models follow the Fama-French Three-Factor Model and the Carhart Four-Factor Model. The analyses results are as follows. Extrapolating monthly profit rates based on R&D expenditure levels, portfolios with low R&D expenditures showed higher earning rates than those with high R&D expenditures. This suggests that high R&D expenditures did not translate into high earning rates. The investor depreciates the R&D expenditures related profitability and the possibility of success in the market, leading to falls in stock prices and a failure to give a positive effect on the firm value. Our research differs from the previous investigations as we carried out an empirical analysis based on the actual investors' attitudes about R&D expenditures and how these can generate excess earnings. Our research results show that the data related to R&D expenditure are not reflected fully in the market.