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A Study on the Influence of Social Regulation on Competition and Innovation: A Case of Fire-retardant Coating Material for Steel Structure Sector in Korea  

Chang, Chul Kwon (삼화페인트, 한국기술교육대학교)
Ji, Ilyong (한국기술교육대학교)
Publication Information
Journal of Korea Technology Innovation Society / v.20, no.4, 2017 , pp. 939-969 More about this Journal
Abstract
The interest in social regulation and its influence on innovation are increasing as the society concerns more for environment and safety. There have been plenty of literature about the impact of social regulation on innovation and its mechanism. Majority of research have been influenced by or based on the famous Porter's hypothesis. However, majority of the literature focus on internal factors such as expected benefits from change of regulations, and it is hard to find one studying social regulation's influence on innovation through external factors such as market or industrial structure. This study addresses this issue of the impact of social regulation on innovation by analyzing the case of fire-retardant coating material for steel structure industry in Korea. It scrutinizes the impact of social regulation which affects competition and innovation on substitute competing market, and tries to reveal that there might exist the other path to innovation, besides the way that the expected benefit from compliance of regulation directly drives innovation. As a result of the case study, we have found that changes in social regulation may act like economic regulation and restructure the market segment and this effect may lead to innovation. It can be explained by the fact that expected benefits from compliance of regulation can be a direct source of innovation, as Porter suggested, but the change of industry structure and competitive strength caused by the change in social regulation can also act as a driving force of innovation.
Keywords
Social regulation; Innovation; Market structure; Competition; Fire-retardant coating material;
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