• Journal of Technology Innovation
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• v.5 no.1
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• pp.181-205
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• 1997

There has been considerable controversy over the impacts of the tax credit on R&D expenditures in many countries. Korea has adopted various kinds of tax credit system to stimulate private firm' R&D expenditures. Korean government, Recently, is trying to reform tax system to reduce tax credit programmes according to Uruguay Round agreement and in line with OECD policy standards. The purpose of this paper is to analyze the effectiveness of current tax credit system on technology innovation in Korea and derive some policy implications over tax reform. In this paper, firstly, I investigate the size of tax reduction effects from each program in theoretical models and simulate the actual rate of individual tax incentive to a unit of R&D expenditure. I find that theoretically the reserve fund for technology development program has given the largest tax reduction effects to private firms irrespective of the R&D incentive system reform. Tax credit on R&D expenditure also has been very effective instrument to firm's tax reduction. Secondly, I try to measure the effectiveness of tax credit through the estimation of effective margianl tax rate between with the system and without the system of credit on R&D expenditure during the tax credit reform periods. I find that the tax credit on R&D has lowered firm's investment cost since the system introduced. I also have strong results that there has been a positive relation between the fluctuation of firm's R&D expenditure and the change of effective marginal tax rate. I suggest that it is better to sustain the system of tax credit on R&D for a while to increase firm's R&D expenditure.

• Journal of Technology Innovation
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• v.21 no.2
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• pp.137-167
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• 2013

This article estimates the scale of impact of expanding governmental fiscal expenditure for R&D investment on the private business enterprise's investment for R&D, and the relationship between business enterprise and university for expanding investment of R&D. According to my results, first, an expanding fiscal expenditure from government for R&D investment leads to increase R&D investment from business enterprise. However, an expanding expenditure from university rather leads to decrease R&D investment from business enterprise. Secondly, the crowding-out effect of expanding R&D investment from University on business enterprise's is very strong, and it is affected by structural changes such as the country's economic power, fiscal stance and cyclical volatility. Third, the more governmental expenditure on university expansive is, the stronger asymmetric relationship between business enterprise and university is, and investment sources of university from business enterprise is the main factor of this relationship. Finally, it is not easy to solve out this asymmetric relationship even through the governmental subsidy.

• Journal of the Korea Academia-Industrial cooperation Society
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• v.10 no.1
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• pp.200-208
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• 2009

Trend of R&D expenditure in Korea during the last 10 years, the R&D expenditure has been constantly increasing at an average rate of 10%. The government R&D ekpenditures or subsidies are increasing rapidly But the studies of evaluating impact of government R&D subsidies are few. This study attempts to empirically investigate the effects of government R&D subsidies on private firm's R&D investment in Korean industry by using Propensity score matching method which sign as to whether the relationship between government subsidies and private R&D investments is on stimulating or displacing private R&D expenditures. Empirically, a firm with government R&D subsidy are 733 million dollar more expenditure then don't receive any government R&D funding. Also Government R&D subsidies greatly increase (statistically significant) company financed R&D expenditures only for large firms but had no effect on the R&D expenditures of small & medium sized firms and venture firms.

• Journal of Technology Innovation
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• v.19 no.3
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• pp.141-174
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• 2011

This paper presents the results of a meta-regression analysis on econometric evidence concerning the relationship between public funding of R&D and private R&D expenditure by reviewing literature and synthesizing existing results. The analysis on the effects of public financing on private investments in R&D has been the object of numerous studies, none of which having arrived at definite conclusion. A meta-analysis based upon a data-base including all relevant studies was carried out to examine whether the characteristics of the applied analysis influence the results. Three different empirical results are presented.

• Journal of Information Technology Applications and Management
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• v.21 no.3
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• pp.1-17
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• 2014

In this study, various characteristics of R&D related economic variables were studied to analyze complexity of science and technology activities in Korea, as reliance of R&D activities of the private sector is growing by the day. In comparison to other countries, this means that it is likely to be fluctuated by economic conditions. This complexity characteristic signifies that the result of science and technology activities can be greatly different from the anticipated results - depending on the influences from economic conditions and the results of science and technology activities which may be unpredictable. After reviewing the results of 17 variables related to science and technology characteristics of complex systems intended for time-series data - in the total R&D expenditure, and private R&D expenditure, numbers of SCI papers, the existence of chaotic characteristics were. using Lyapunov Exponent, Hurst Exponent, BDS test. This result reveals science and technology activity of the three most important components in Korea which are; heavy dependence on initial condition, the long term memory of time series, and non-linear structure. As stable R&D investment and result are needed in order to maintain steady development of Korea economy, the R&D structure should be less influenced by business cycles and more effective technology development policy for improving human resource development must be set in motion. And to minimize the risk of new technology, the construction of sophisticated technology forecasting system should take into account, for development of R&D system.

• Journal of the Korea Academia-Industrial cooperation Society
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• v.11 no.5
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• pp.1829-1837
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• 2010

During the last year, public expenditures which provided the central and local governments for boosting research and development (R&D) activities of the private sector has been constantly increasing. 17 percent of public total R&D expenditure supported to private sector and 9 percent of R&D expenditure in service sector were public R&D funding. However, studies evaluating the impact of public R&D subsidies are quite few. The aim of this study empirically investigate the average effects of public R&D subsidies on the innovation activities in private sector, specifically those engaged in Korean service firms by using Propensity Score Matching(PSM) method. The effect of R&D subsidies is derived from either qualitative and quantitative outcomes of innovation activities, which is defined as the difference between innovation outcome of the treatment group (receiving R&D subsidies) and that of the control group (non receiving R&D subsidies) after the matching method. As a result of empirical analysis, government R&D grants stimulate only firm-first innovation outcomes in service firms. It is represent that public R&D subsidies cannot be contributed to level of national innovation and the total amount of national innovation activities but can enhance firm competitiveness from increasing firm-first innovation activities.

• Journal of Technology Innovation
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• v.21 no.1
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• pp.1-26
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• 2013

The objectives of this paper are to analyze the effect of government R&D expenditure on employment in the Korean manufacturing sector in which employment is rapidly declining. According to the results of our empirical analysis, government R&D expenditure decreases the level of employment in Korean manufacturing sector in short term period, but it has positive effect on employment by compensation effect in the middle and long term period. Second, the effect of private R&D expenditure on job creation is three times larger than that of government R&D expenditure. Third, costs of labor and capital has negative effect on employment. This study is believed to help understanding the relation between R&D expenditure and employment, and providing policy implications of how to plan and manage government R&D expenditure as a tool of job creation.

• Proceedings of the Polymer Society of Korea Conference
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• 2006.10a
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• pp.60-61
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• 2006

New Energy and Industrial Technology Development Organization (NEDO) promotes R&D that individual private sector enterprises can not undertake by themselves. To do this, it utilizes an extensive network that supports cooperation between industries, universities, and public research organizations. NEDO's government-funded R&D budget for FY2005 totals approximately 148.8 billion yen. Fuel cells and hydrogen technology development project is one of NEDO's emphasizing projects. The budget size was ${\yen}$20.8 billion, corresponding to about 60% of annual expenditure of Japanese government for fuel cells in FY2005. These projects consist of 8 programs as follows.

• 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 the Korea Contents Association
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• v.18 no.4
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• pp.444-453
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• 2018

The study addresses the analysis on the financial determinants of corporate research and development (R&D) expenditure in finance. Overall level of R&D spending was estimated as one of the top-tier on a global basis and a majority of the expenditure was invested by large domestic firms in private sector. Consequently, financial factors that influence R&D intensity were empirically tested in the first hypothesis by using conditional quantile regression model for firms listed in KOSPI stock market in the post-era of the global financial turmoil. Firms in the groups of high- and low-R&D intensity were statistically compared to detect financial differences in the second hypothesis which was accompanied by the test of multi-logit model that included firms without R&D outlay. Concerning the results of the hypothesis tests, R&D spending of the prior fiscal year, firm size, business risk and advertising expense overall showed statistically significant impacts to determine the level. As an extended study of [1] that had examined financial factors of R&D intensity at the macro-level, the results of the present study are anticipated to contribute to maximizing shareholders' wealth in advance or emerging capital markets, when applied to find an optimal level of R&D expenditure.