• Journal of Korea Technology Innovation Society
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• v.10 no.3
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• pp.431-457
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• 2007

The main purpose of this study is to analyze the determinants of innovation in the medium core firms that belong to components and materials industry. For this purpose, we introduce the Schumpeterian hypothesis as a theoretical background at first. According to the Schumpeterian hypothesis, large firms in concentrated markets are likely to have more innovative activities. That means, firm site and market structure are the main determinant of innovation. Then, we propose other economic factors that have been considered to have effects on firms' innovative activities in previous studies. Those factors are export, profit, growth rate, R&D expenditure and capital intensity. In order to analyze the determinants of innovation, we estimate whether firm size, market structure, export, profit, growth rate, R&D expenditure and capital intensity affect to the possibility of creating innovation in medium core firms. In order to do this, our study uses survey data from 'Korean Innovation Survey(2005)' conducted by STEPI as well as utilizes the probit model as an analytical method. According to the empirical results, firm size has a positive relationship with innovative activities of medium core firms but market concentration does not. We find the negative correlation between market concentration and innovative activities in this study. Thus, was have to say that we do not fully support the Schumpeterian hypothesis in this case. Among other variables, profit and R&D expenditure are estimated to have positive relationship with innovative activities, while export and capital intensity are estimated to have negative relationship with innovative activities. In case of growth rate, we do not find any significant relationship with innovative activities. In conclusion, larger firm size, higher market competition, more access to the financial market and additional R&D investment would facilitate innovative activities of medium core firms. However, we have to review the relationship between export and innovative activities that has been estimated in this study. While the estimated effect of export on innovative activities can be explained by the own characteristics of medium core firms that produce and supply capital goods to final manufacturer, we have address this issue in the future.

• Journal of the Korean Operations Research and Management Science Society
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• v.35 no.1
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• pp.67-81
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• 2010

In Schumpeterian competition, superior profit arises from successful innovation created by firm's R&D strategy. Such R&D strategy diverges as time passes. This study examines empirically the effects of diverged forms of R&D strategy such as technological assets, technological diversity, and technological similarity on firm performance in Korean pharmaceutical industry. With the financial and patent data of 96 firms for 14 years from 1994 to 2007, we measured variables. And then we performed panel analysis with 3 years lag between dependent variable and other variables. The result shows that firm performance increases as technological asset and technological diversification increase. But technological similarity positively affects on firm performance in opposition to our hypothesis. We interpret and discuss these results and highlight the theoretical and practical implications of our findings.

• Journal of Technology Innovation
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• v.16 no.2
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• pp.147-165
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• 2008

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.

• Journal of Technology Innovation
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• v.21 no.2
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• pp.1-24
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• 2013

In spite of the increasing importance of service sector, most previous studies on schumpeterian hypotheses originated from manufacturing firms that have the needs to invest heavily in research and development (R&D). Conversely, we investigated the relationship between technological innovation activity and size of firms using panel data. Results of the analysis, the following results were obtained. First, the details depending on the industry sector was divided into active and vigorous industry technology innovation activities did not. Second, the relationship between firm size and technological innovation activity may not be, depending on the industry, some of the U-shaped model, may be. Third, showed fewer intangible assets, more debt, larger exports which further promote the technological innovation activities in industry. Finally, the relationship is responsive depend on the firm size variable.

• Journal of Korea Technology Innovation Society
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• v.13 no.1
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• pp.124-139
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• 2010

This study analyzes determinants of innovation in Korea manufacturing industries from 2005 to 2007. In order to do this, we use raw data from 'Korea Innovation Survey 2008: Manufacturing Sector' conducted by STEPI, and also collect financial statement data from Korea Investors Service. As an analytical method for the empirical test, we utilize Probit model. Empirical results show that firm size and market concentration have positive relationship with firm's innovation activities. These support the ‘Schumpeterian hypothesis’. This would be the most distinguished feature of this study compared to previous literatures.Our study also shows that R&D personnel ratio, R&D intensity, and advertising intensity have positive effects on firms' innovation. Thus, we can say that R&D activities and consumer orientation are the main determinants of innovation. However, profit ratio and growth rate do not have any statistically significant effect on firms' innovation.

• ETRI Journal
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• v.25 no.4
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• pp.258-265
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• 2003

In our study, we extracted the market, finance, and government factors determining R&D investment of individual firms in the IT industry in Korea. We collected the financial data of 515 individual firms belonging to IT and non-IT industries between 1980 and 1999 from the Korea Investors Service's database and investigated the empirical relationship between the factors using an ordinary regression model, a fixed effects model, and a random effects model. The main findings of our study are as follows: i) The Herfindahl Index variable representing the degree of market concentration is statistically insignificant in explaining R&D expenditures in the IT manufacturing industry. ii) Assets, which is used as a proxy variable for firm size, have a positive and statistically significant coefficient. These two results suggest that the Schumpeterian Hypothesis may be only partially applied to the IT manufacturing industry in Korea. iii) The dividend variable has a negative value and is statistically significant, indicating that a tendency of high dividends can restrict the internal cash flow for R&D investment. iv) The sales variable representing growth potential shows a positive coefficient. v) The subsidy as a proxy variable for governmental R&D promotion policies is positively correlated with R&D expenditure. This suggests that government policy has played a significant role in promoting R&D activities of IT firms in Korea since 1980. vi) Using a dummy variable, we verified that firms reduced their R&D investments to secure sufficient liquidity under the restructuring pressure during Korea's 1998 and 1999 economic crisis.