• Journal of the Korea Academia-Industrial cooperation Society
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• v.11 no.5
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• pp.1829-1837
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• 2010

During the last year, public expenditures which provided the central and local governments for boosting research and development (R&D) activities of the private sector has been constantly increasing. 17 percent of public total R&D expenditure supported to private sector and 9 percent of R&D expenditure in service sector were public R&D funding. However, studies evaluating the impact of public R&D subsidies are quite few. The aim of this study empirically investigate the average effects of public R&D subsidies on the innovation activities in private sector, specifically those engaged in Korean service firms by using Propensity Score Matching(PSM) method. The effect of R&D subsidies is derived from either qualitative and quantitative outcomes of innovation activities, which is defined as the difference between innovation outcome of the treatment group (receiving R&D subsidies) and that of the control group (non receiving R&D subsidies) after the matching method. As a result of empirical analysis, government R&D grants stimulate only firm-first innovation outcomes in service firms. It is represent that public R&D subsidies cannot be contributed to level of national innovation and the total amount of national innovation activities but can enhance firm competitiveness from increasing firm-first innovation activities.

• Journal of Technology Innovation
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• v.22 no.4
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• pp.199-233
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• 2014

This paper attempts to investigate how and why the additionality effects occur in the case when a firm receives government subsidy as opposed to counterfactual situation. To demonstrate this, we selected 12 SMEs(small and medium enterprises) firms in Daejeon area and have conducted multiple case studies. In order to analyse the multiple cases of firms, we classified firms innovative activities into three stages which are composed of input, behaviour and output stages and related various factors. Furthermore, we investigated the differences according to types of firms and stages of firm growth. Empirical results show that various input, behaviour and output additionality effects exist when firms receive public subsidies. Compared to companies in the growth and mature stages, startup phase companies depend on government subsidy extensively and they use public subsidies strategically to develop new product and to change their strategic direction. The attitude of firms to use government subsidies is different according to their types and stage of growth as well.

• 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 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.

• The Journal of Asian Finance, Economics and Business
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• v.4 no.2
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• pp.25-36
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• 2017

Subsidies are an instrumental policy making tool for many governments, but their importance depends on the market situation of the national economy. Efficient subsidy implementation would allow the government to correct market failure thereby aligning social and private costs and benefit. The general objective of this study is to justify the need to rationalise subsidies for food items such as flour. This study assessed the structure and conducts of the general purpose flour market in Malaysia; and analysed the impact of subsidies on market performance to recommend policies to increase market efficiency under the subsidy rationalisation program. To accomplish these objectives, the study adopted a microeconomics market analysis as well as the standard structure and performance analysis method. These two approaches showed the characteristics of an industry's consumer behaviour, competition, as well as the efficiency associated with government regulatory policies on the flour industry. One of the biggest influences on the domestic market is related to the food consumption behaviour of the general population. Food consumption behaviour reflects global trends. As income rises, food trends tend to be consumed in processed form or in such a way that adds value in another manner such as the preparation of food products.

• STI Policy Review
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• v.4 no.1
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• pp.27-53
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• 2013

Technology research and development (R&D) expenditures have increased as most countries recognize that technological innovation is a significant factor for continued economic growth. R&D subsidies by governmental entities were permitted in accordance with the Subsidy and Countervailing Measure (SCM) Agreement under the World Trade Organization (WTO) system. However, according to Article 31 of the SCM Agreement the provision for R&D subsidies have been terminated as of January 2000 and legal disputes over R&D subsidies are likely to increase. The aircraft industry has been the only industry where R&D subsidies have become an issue under the WTO. This paper examines international trade disputes within the aircraft industry in regards to measures by Canada and bilateral disputes between the U.S. and the European Communities (EC). In these cases, various R&D subsidies on civil aircraft are found to be inconsistent with WTO rules. This study summarizes the WTO decisions on various R&D subsidies disputed in the aircraft cases and examines the type of R&D subsidies found to be inconsistent (or consistent) with the WTO to provide guidelines for current and future R&D subsidy policies in high-tech industries. The Canada-Aircraft case indicates that R&D subsidies directly targeted towards near market R&D projects with a high export potential will likely be in violation of current WTO rules. Furthermore, findings from the EC-Aircraft and the U.S.-Aircraft cases suggest that the forms (or the methods) of R&D subsidy distribution were not a sufficient condition for the WTO ruling; instead, what ultimately mattered was whether and specifically to whom the benefits of the R&D subsidies are conferred by the government entities.

• Health Policy and Management
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• v.11 no.1
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• pp.107-130
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• 2001

During the last year, we had a very severe situation with the strike of physicians working in medical facilities. From that time, many politicians and scholars insisted on the expansion of public hospitals to enhance the public role in the medical care sector. They think that private medical facilities work for profit motivation and that the high proportion of private to whole facilities is an obstacle to the public function of medical care under social insurance system. They found that one of the reasons for failing to prevent the physicians' strike was the high proportion of private facilities. Others insisted that the strike was not a good reason for the expansion of public hospitals. The physicians' strike was a very rare case, and it is not a good basis for generalization of the discussion of public hospitals. Last year almost all apprentice physicians in public facilities took part in the strike, and consequently the public hospitals also lost the role of public function. They view this increasing involvement of government in the medical sector as improper and the cause of inefficiencies. In this paper we review the debate over the expansion of public facilities. To clarify the debate, we review traditional criteria for the role of government in a market system and to apply these criteria to medical care. There are two traditional areas where government Is acknowledged to have a role in a market system: market imperfections and market failure. Where market imperfections and market failure exist, there may be a role for government. The justifications for government intervention are consumer protection and the existence of externalities. One of externalities is to provide medical care for the poor. The appropriate measures to provide medical owe to the poor can be sought in both demand and supply side subsidies. National health insurance is a method of demand subsidies and establishment of public hospitals is a method of supply side subsidies. Under the National Health Insurance System, the expansion of public hospitals is not an appropriate subsidy policy.

• Journal of Fisheries and Marine Sciences Education
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• v.17 no.3
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• pp.324-339
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• 2005

The WTO/DDA Negotiation on the Fisheries Subsidies started by DDA(Doha Development Agenda : 2001.11)at early 2002 has been held about 20 times until the fist half of 2005. The Negotiation will be terminated until the end of 2005 but now, it is impossible to predict the exact conclusion of the Negotiation. There is a sharp conflict of opinion on the WTO/DDA Negotiation on the Fisheries Subsidies between FFG(Fish Friends Groups : USA, New Zealand etc) and Anti-FFG(Rep. Korea, Japan etc). The Fisheries Subsidies is regulated by the WTO/DDA Negotiation that regulates on the subsidies of industrial products, fisheries products, forest products. Considering the progress of the WTO/DDA Negotiation on the Fisheries Subsidies, Guidelines for the Fisheries Subsidies Negotiation were established in Doha Ministerial Declaration at 2001 and a necessity of a special regulation on the Fisheries Subsidies has been discussed from 2002 to 2004. After june, 2004, the Negotiation was proceeding as Rep. Korea, Japan and Taiwan agreed with discussing a special regulation on the Fisheries Subsidies and At 1st, August, 2004, they reached an agreement on a necessity of a special regulation on the Fisheries Subsidies. At Feb, 2005, discussion was suspended because of presenting the joint proposal from 3 countries(Rep. Korea, Japan and Taiwan) and now discussion on the Fisheries Subsidies is giving the first consideration to classification of prohibited/non-actionable subsidies, S&D of a developing countries, small fisheries, problems of farming, grace period etc. From now on, Considering the 18th~the 20th negotiations, it is expected that discussion of fisheries subsidies regulation including property and range of prohibited/non-actionable subsidies, S&D of a developing countries, a definition of small fisheries is accelerated. In this point of view, this paper analyzed and arranged every country's proposals holding our own position and took a survey to fishermen and fisheries experts about prohibited/non-actionable subsidies. In addition, this paper intends to suggest the way of future-negotiation and provides essential data to help government's policy making through analyzing prohibited/ non-actionable subsidies, farming subsidies, S&D of a developing countries, small scale fisheries.

• Analyses & Alternatives
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• v.5 no.2
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• pp.39-76
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• 2021

This article examines the effect of CEO's political connections on firm performance in Chinese private firms. Following the upper echelon theory and human capital theory, CEO's personal characteristics affect the strategic decision-making of the firm, and it is also firm-specific advantages that work as the human capital for the sustainable growth of the firm. In this regard, this article tries to empirically confirm whether CEO's political connections have positive effects on firm performance as the firm's human capital by dividing the Chinese local governments, which is a direct subject of political connections hierarchically. In addition, this research examines the mediating effects of government subsidies between political connections and firm performance. To verify these questions, we use a sample of 9,849 observations of 1,451 private firms listed on the Shanghai and Shenzhen stock exchanges from 2008 to 2016, the results show that the CEO's political connections are positively related to firm performance. Moreover, we find that only political connections with the provincial local government had a positive effect on firm performance. It indicates that values and influences of human capital held by CEOs only affect when they are related to the highest local government. Finally, when CEOs have political connections with city-level, it shows complete mediating effect. It provides empirical evidence to find that CEO's political connections affect firm performance as the results of non-market strategic of firms.

• 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.