• Journal of Korea Technology Innovation Society
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• v.21 no.4
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• pp.1366-1385
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• 2018

Recently, government policy focuses on R&D subsidies for venture firms in the early and medium stage. However, due to the 'asymmetric information' on those firms, a concern about the possibility of adverse selection of government policy, that is, whether the R&D subsidies are offered to the less-growth potential venture firms is on the rise. Therefore, based on the "2015 venture firm's survey" data in Korea, we compared the managerial efficiency of venture firms in manufacturing sectors by dividing them into beneficiary and non-beneficiary groups at government R&D subsidies. We found that the beneficiary groups showed lower managerial efficiency than non-beneficiary groups, even if they are superior to non-beneficiary groups in technological performance. We also observed that the phenomenon involve 'low managerial efficiency in the beneficiary groups' is more relevant in mid-high tech. manufacturing sectors. Our findings provide an exploratory empirical evidence of the concern about adverse selection in the selection of R&D subsidies beneficiary groups. Therefore, the government should consider managerial performance as the key criteria for selecting R&D subsidies beneficiary groups, rather than depending on technological performance solely. Furthermore, the government should develop other complementary policies to support financial performance of the groups. Lastly, the government should make those policies attract venture firms with potential to achieve financial performance.

• Journal of Korea Trade
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• v.24 no.2
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• pp.53-67
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• 2020

Purpose - The purpose of this paper is to study strategic trade policies under international process research and development (R&D) competition with or without market leaders for free trade and a subsidy regime and compare the effects of R&D subsidies and export subsidies on the equilibrium levels of firm profit and social welfare. Design/methodology - For the analysis, we use previous work by Haaland and Kind (2008) and construct a differentiated goods duopoly model, wherein two firms compete via quantity in a third-country market for free trade and the subsidy regime. We consider simultaneous-move quantity competition when the two firms choose their quantities simultaneously and sequential-move quantity competition when they choose their quantities sequentially. The results are compared to those of Balboa, Daughety and Reinganum (2004), who studied export subsidies. Findings - The following are the findings. First, the results of firm preference orderings regarding firm position from Dowrick (1986) and Balboa, Daughety and Reinganum (2004) may not hold in our model when the firms' strategies are strategic substitutes under free trade. Second, the preference rankings under Cournot competition for free trade and a subsidy regime are the same as those in the strategic trade policy of export subsidy. Third, except for the cases of too close substitutes and complements, the results of firm and government preferences regarding firm position are different from those of Balboa, Daughety and Reinganum (2004) in that Stackelberg leadership in a subsidy regime is advantageous when the goods are substitutes but is disadvantageous when the goods are complements. Moreover, the equilibrium level of firm profit is the highest in the Cournot-Nash play when the goods are substitutes in a subsidy regime. Fourth, except for the cases of too close substitutes and complements, the results of firms' and their respective governments' trade regime preferences are similar to those of Balboa, Daughety and Reinganum (2004) in that a Stackelberg leader firm and government prefer free trade if the goods are substitutes and prefer a subsidy regime if the goods are complements. Furthermore, a Stackelberg follower firm and government strongly prefer a subsidy regime to free trade. Originality/value - By analyzing the effects of R&D subsidies and export subsidies in international markets, we can find similarities and differences between them in international markets.

• Journal of Technology Innovation
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• v.24 no.1
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• pp.1-24
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• 2016

This study examined 142 electronic components, video, audio, and communications equipment manufacturers (KSIC 32) out of all the SMEs that responded to the Survey on Technology of the Small and Medium Enterprises in both 2005 and 2007 and empirically analyzed how the external resources utilization and the absorptive capability affected the management and the innovation performance in two years as well as how the absorptive capability moderated these relationships. According to the results of analysis, the external resources utilization, as measured by the technology collaboration and the governments R&D subsidies, did not have a significant impact on performance whereas R&D investment showed a positive (+) influence on the sales and R&D personnel ratio, negative (-). On the other hand, the moderating effect of absorptive capability varied by measurement method and independent variables. That is, when a technology collaboration takes place, the performance improved with the increase of R&D investment but R&D personnel ration had an opposite effect. The companies whose performance improved as the government R&D subsidies increase are those with low R&D investment or high R&D personnel ratio. These results demonstrate that the SME's external resources utilization cannot replace the internal and that the absorptive capability needs to be accumulated to maximize the effectiveness of external resources utilization. Also, the technology collaboration requires SME's aggressive investment in R&D and the government R&D subsidies turn out to be more helpful for the companies that already have the R&D personnel but have been unable to develop their own technology due to insufficient funds. This study has limitations in that it was conducted within the limited industry categories and samples, but has overcome those of the existing researches by identifying causal relationships through the use of longitudinal data.

• Journal of Technology Innovation
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• v.31 no.1
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• pp.149-173
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• 2023

The purpose of this paper is to analyze the effect of government R&D subsidies on business performance of SMEs in the field of Land, Infrastructure, and Transport. To this end, based on domestic and foreign literature, the performance derived through R&D was classified as primary and secondary parameters, and the commercialization program operated by the government was set as a moderating variable. Regression analysis, double mediation analysis, and moderated mediation effect analysis were used to confirm the effect of government R&D subsidy on project performance and process. As a result of this study, it was confirmed that government R&D subsidies have a significant effect on corporate management performance, and it was confirmed that the primary performance such as papers and patents and the secondary performance such as prototypes and legislative revisions have a double mediating. In addition, when the commercialization program was applied to the first and second parameters, it was confirmed that it played a moderated mediating effect. The results of this study are expected to be used when establishing government R&D support plans to expand business performance and economic effects in the future.

• Journal of Korea Technology Innovation Society
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• v.15 no.3
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• pp.649-674
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• 2012

The purpose of this study is to investigate the effects of public R&D subsidies on private R&D. We have analyzed rationales for the public R&D subsidy from different perspectives. On the basis of literature review, a two step research model is constructed: participation phase (when firms benefit from public subsidies) and decision phase (when firms make decision on additional R&D investments). Using propensity score matching(PSM) method, we compare the potential outcome of the treated group to a matched controlled group of non-subsidized firms. The data used in this paper was collected from various sources. The Korean Innovation Survey 2008(manufacturing sector) is a main source of data. Financial data such as revenue, asset and capital stock, and number of employees were supplemented from the Nice Information Service KIS Value database. The R&D survey, conducted by MEST(Ministry of Education, Science and Technology) each year, was also used for the R&D expenditures of the manufacturing firms. This study comes up with the following empirical results. First, a firm's innovation capability, financial constraints, and sector appear to influence the selection of firms who were benefited from government's financial supports for R&D. Second, empirical results show that public R&D funding complements private investment on average and appear to have perpetual effects on the following year. Finally, sectoral difference in the effect of public subsidies on firms' R&D investment was confirmed. In addition, SMEs show more positive effects than large firms.

• Journal of Convergence for Information Technology
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• v.10 no.1
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• pp.1-12
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• 2020

The Government provides a financial assistance to stimulate firm R&D and innovation activities. Previous papers on the impact of public subsidies on firm R&D investments mainly had a focus on an individual policy tool regardless of potential impacts of other policy instruments. This study addresses this gap by examining the effects of policy mix regarding a subsidy and a tax credit. The empirical analyses from fixed effect model using Survey on Technology of SMEs 2015-2017 revealed valuable points. First, policy mix induces more R&D investment of SMEs, which in turn, shows a complementary relationship between two instruments. Second, even if impact of tax credit controlled, subsidy is positively associated with SMEs R&D investment. These findings justify policy mix interventions to promote SME R&D activity. Moreover, grants can be applied as a more useful policy tool for SMEs that are constrained by resources and capabilities.

• Asia-Pacific Journal of Business
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• v.12 no.3
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• pp.281-294
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• 2021

Purpose - The purpose of this study was verifying the policy effects by field of innovative growth engines, focusing on the discussion of the relationship between government support and corporate R&D activities (substitute/complementary goods), and based on the results, policy recommendations for promoting private R&D were carried out. Design/methodology/approach - Through literature research, academic/theoretical discussions about relationship between government support and corporate R&D activities were synthesized. Next, survey data were collected for companies engaged in the field of innovative growth engines and empirical analysis was conducted on the relationship between government support and R&D activities in 13 major sectors. Findings - First, as a result of analyzing all companies regardless of sector, government R&D subsidies had a positive (+) relationship with R&D activities of companies engaged in innovative growth engines, that is, a complementary relationship. Next, as a result of performing empirical analysis by dividing the 13 fields, it was found that 9 fields were complementary goods in which government support had a positive (+) effect on the R&D activities of companies. On the other hand, in the remaining four fields, the effect of government support on corporate R&D activities was not statistically significant. Research implications or Originality - In order to promote R&D activities of companies in the 9 fields where government support acts as a complementary product, it is necessary to establish policies centered on direct government support. On the other hand, it would be more desirable to seek indirect support rather than direct support in the 4 fields where government support did not have a statistically significant effect on corporate R&D activities.

• Journal of Technology Innovation
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• v.14 no.1
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• pp.101-118
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• 2006

The relationship between R&D Polices(R&D subsidy, tax incentives) and firm R&D expenditures is analyzed through firm's profit maximization function. As a result, the relationship between R&D policies and fmn R&D expenditures is determined by the relationship between firm R&D expenditures and market price. In case of major innovation which cause the fall of market price, the elasticity R&D subsidy and firm R&D expenditures is negative(substitution). In case of minor innovation which cause the rise of market price, the elasticity R&D subsidy and firm R&D expenditures is positive(complement). Tax incentives is bring about the increase of firm R&D expenditures. R&D subsidy and tax incentives are substitutively influenced at firm R&D expenditures.

• 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 Korea Technology Innovation Society
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• v.21 no.4
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• pp.1313-1344
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• 2018

This study aims at investigating the effects of Government R&D subsidies. We analyse the effects of inputs and behavioral additionality on the output additionality. We also measure the moderate effects of the experiences of benefiting from government R&D on the relationship between inputs and behavioral additionality and the output additionality. We conducted a structured questionnaire on the companies who have participated in promotion program of the Korea Innovation Cluster. 126 responses were collected and alnalysed using the OLS technique. Empirical results show that the relationship between input/behavioral additionality (management, follow-up, cognitive capacity) and output additionality had positive effect. The moderating effects of experiences of R&D subsidy on the relationship between input additionality and output additionality and the relationship between cognitive additionality and the output additionality appear to be statistically significant.