• 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.

• The Journal of the Korea Contents Association
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• v.17 no.5
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• pp.8-17
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• 2017

Using 1855 observations from 5 years-371 firms panel data during 2010 to 2014 in Chinese stock exchanges, this study examines the impact of managers' ownership on R & D expenditures. The empirical study finds that when firms are state-owned, managers' ownership have negative relation with the level of R & D expenses as well as the likelihood of executing R & D investment, implying that managers are less likely to invest in high risky projects due to managerial ownership's entrenchment effects to pursue private benefits rather than alignment of interest effect as shareholders. The empirical study also finds that when firms are private-owned, managerial ownership are inverse U shaped related to the level of R & D expenses, implying that managers are less likely to invest in high risky projects due to increasing risk aversion resulting from concentration of private wealth at its high level while managers are more likely to invest in high risky projects due to increasing incentives as shareholders at its low level. The results support that the effects of managerial ownership on R & D expenses may be different according to the ownership type of Chinese listed firms.

• Knowledge Management Research
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• v.21 no.1
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• pp.137-150
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• 2020

This study analyzes not only the direct impact of R&D investment on corporate growth for 578 private firms in 2007-2016, but also whether corporate innovation activities play a role as a mediating parameter between R&D investment and corporate growth. For this purpose, we classify companies into IT and non-IT companies and measure the mediating effect by dividing innovation activities into the number of registered patents, applied patents, and sum of them. In addition, this study is based on both the systemGMM which is considered to be effective in solving the endogenous problems caused by the cross-sectional analysis in previous studies and ML-SEM which is a new method recently, and then compares two results. According to the empirical results, innovation activities has a role as partly mediating parameter on sales growth in non-IT companies. On the other hands, in IT companies, the increase in R&D investment leads to a decrease in sales of the company, and the increase in innovation activities increases the sales of the company. However, it was confirmed that IT companies also had positive effects by adjusting the lag of the R&D. In other words, this suggests that securing patents is more important than R&D investment for direct sales growth of IT companies. It is also evidence that immediate introduction of technology is necessary to respond to the speed of technological change since the cycle time of technologies of the IT field is relatively shorter compared to that of other fields.

• 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.7 no.2
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• pp.1-20
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• 1999

This paper investigates the effects of various R&D investments on economic growth empirically. To this end, the relationships between various R&D investments and economic growth are analysed, and the rates of return of R&D investments are estimated. Furthermore, the effect of government R&D investment on private sector R&D investment, and the effect of social factors, which affect the relationship between the R&D inputs and economic growth, are analysed. Based on the results of this analysis, a simulation model is developed, which shows the relationship between R&D investments and economic growth rate; this model is verified by analysing the correlation between the actual and the estimated economic growth rate, using the data between 1981 and 1995 of eight selected countries. The validation results show that the simulation model has sufficient accuracy to be used for evaluating and proposing R&D policies for the countries for which appropriate data is available. However, the time-lag effect, which is naturally believed to exist between the R&D input and the economic growth, could not be analysed in a mathematical form, because of the lack of the data to establish this relationship. Thus, when estimating the relationship between them, the time-lag effect in this relationship was included implicitly by using the data of fifteen years.

• Journal of the Korea Academia-Industrial cooperation Society
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• v.12 no.12
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• pp.5558-5563
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• 2011

Using longitudinal data of 108 firms in large business conglomerates from 2001 to 2009, this study examines the impact of controlling shareholders' control-ownership disparity on R&D investment. The study finds that control-ownership disparity is negatively related to R&D intensity. This empirical result suggests that controlling shareholders' control rights in excess of ownership rights incent controlling shareholders' expropriation for their private interests, leading to decreased R&D investment which enhances firm value in the long term.

• KDI Journal of Economic Policy
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• v.14 no.2
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• pp.77-108
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• 1992

Many economists and policymakers regard the ratio of R&D investment to GNP to be a good indicator of a nation's technological capabilities. Consequently, their major policy recommendation to promote technological development is a rapid expansion in R&D investment. However, a low R&D ratio does not necessarily mean less efforts at technological advancement since the composition of technologies to be developed varies depending upon the stage of economic development. Technology policy to improve the international competitiveness of domestic industries should be based on the stage of economic development and present technological status rather than on a simple comparison with advanced countries. At Korea's stage of development, maximizing the efficiency of R&D investment is more important than enlarging the size of the investment. Strategic alliances between domestic firms and foreign enterprises should be encouraged to save time and costs involved in acquiring new technologies and learning how to use them. The government should establish institutional devices to stimulate private enterprises to internationalize their business activities such as R&D, production, and marketing. The government should also promote the development of domestic and international R&D networks, which can serve as the infrastructure for technological innovations.

• Journal of Technology Innovation
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• v.27 no.1
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• pp.1-43
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• 2019

The significance of SMEs (small and medium-sized enterprises) is gradually highlighted as we have entered the age of "New Normal." The South Korean government support these enterprises to boost economic growth and create more jobs. It also releases numerous policies such as national R&D projects and expanding tax incentive services particularly aiming at promoting dramatic investment in R&D and technological innovation. There is a sharp contrast regarding the efficiency of direct or indirect supports for encouraging R&D investment launched by SMEs depending on researchers. However, there has been little attempt to explore the optimal combination of two policy tools. Amid promoting affiliated governmental departments in charge of SMEs policies and constantly growing R&D investment, it is an appropriate time to discuss the medium and long-term direction for the optimal policy mix of direct and indirect supports. In this study, the author obtained 32 relevant studies published earlier in the domestic journals, explored literatures more systematically, and further conducted a meta-analysis. It is dedicated to summarizing relevant controversies and organizes them empirically beyond merely verifying whether policy support stimulates private R&D investment by SMEs. The meta-analysis showed that it would be effective to support as tax for large enterprises, while subsidiary support for SMEs. However, indirect support needs to be progressively increased as direct support primarily accounts for the entire R&D support for South Korean SMEs.

• Journal of Korean Society of Industrial and Systems Engineering
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• v.43 no.3
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• pp.87-94
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• 2020

In this study, the factors affecting the efficiency of 48 projects of private R&D institutes were analyzed using the Tobit model. Influencing factors were selected as open R&D network size, IT industry, interaction between R&D network size and IT industry, and type of R&D network cooperation. As a result of Tobit analysis, the R&D network size, the IT industry, and the type of R&D network cooperation were found to be significant. The larger the open R&D network size, the lower the efficiency, and the IT industry showed lower R&D efficiency than other industries. In addition, cooperation with universities and research institutes showed lower R&D efficiency than cooperation with companies. As a result of these studies, companies will be able to select and focus on cooperation with the outside in relations and investment allocation.

• 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.