Empirical Research on Cyclical Patterns of R&D Investment

R&D 투자의 경기순환적 특성에 관한 연구

The researches on cyclical patterns of R&D investment has a long history in developed economies since the Schumpeterian hypothesis that long-term productivity-enhancing innovative activities increase during recession. But in Korea the cyclical patterns of R&D investment is one of the unexplored academic areas. Unlike theoretical explanation of R&D's cyclical pattern, empirical results has shown that R&D investment is procyclical to business cycles in developed countries. This paper investigates whether Korean R&D investment show procyclical or countercyclical pattern to business cycles. The empirical results show that Korean R&D investment in private area is procyclical to business cycles with statistical significance, which confirms the credit-constraint theory's prediction, while public area's is not sensitive to them. Public R&D investment has long-term investment characteristics and can be utilized to stabilize procyclically-fluctuating private R&D investment.