The effect of risk-sharing government subsidy on corporate R&amp;D investment: Empirical evidence from Korea

Lee, Eui Young; Cin, Beom Cheol

doi:10.1016/j.techfore.2010.01.012

Cited by 115 publications

(54 citation statements)

References 20 publications

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“…Empirically, Czarnitzki and Hussinger [13] found that government subsidies directly improved enterprises' R&D input and indirectly led to an increase in intangible assets. Similarly, Lee and Cin [14] pointed out that government subsidies were beneficial to the R&D investment of Korean small and medium-sized enterprises. Jiang et al [15] found that government subsidies had a significantly positive impact on R&D intensity of China's new energy vehicle enterprises.…”

Section: Relationship Between Government Subsidies and Randd Investmentmentioning

confidence: 98%

The Impact of Government Subsidies on Private R&D and Firm Performance: Does Ownership Matter in China’s Manufacturing Industry?

Jin

Shang

2018

Sustainability

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Government subsidies as a policy instrument are used to alleviate market failure in research and development (R&D) activities. We aim to understand the influence of government subsidies on enterprises' R&D investment and performance. We are also interested in examining how the attributes of enterprise ownership act as a moderating variable for the relationship between government subsidies, R&D investment, and firm performance. We use firm-level data on China's manufacturing listed companies from 2011 to 2015. The results show that receiving government subsidies improves private R&D investment and firm performance, and state-owned enterprises (SOEs) can obtain more subsidies than private-owned enterprises (POEs). However, the impact of government subsidies on private R&D investment is stronger in POEs than in SOEs of China. In additional analyses, we also examine this relationship by industry, region, subsidy intensity, and R&D intensity. This study has important policy implications for regulators to improve the effectiveness of government subsidies.

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Section: Relationship Between Government Subsidies and Randd Investmentmentioning

confidence: 98%

The Impact of Government Subsidies on Private R&D and Firm Performance: Does Ownership Matter in China’s Manufacturing Industry?

Jin

Shang

2018

Sustainability

View full text Add to dashboard Cite

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“…Some of them focus on the input of enterprise innovation process (i.e., supply side) and some focus on innovation output (i.e., demand side) [31]. Government subsidies, whether in monetary or non-monetary form, can add additional innovative resources to enterprises and effectively reduce the risk and cost of R&D. The financial constraints of enterprises can be mitigated so as to conduct a new round of R&D investment, which is expected to increase innovation output [2,32].…”

Section: Government Funding and Innovation Performancementioning

confidence: 99%

“…So, there is a virtuous circle: Government funding-R&D investment-innovation performance-government funding-etc. Government funding reduces R&D costs and R&D risks by supporting R&D activities [32], and guides enterprises to increase innovation investment. Enterprises turn government funding into R&D funds, thus promoting the overall innovation level.…”

Section: Government Funding and Innovation Performancementioning

confidence: 99%

Relationships among Government Funding, R&D Model and Innovation Performance: A Study on the Chinese Textile Industry

Zhang

Cheng

2020

Sustainability

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The textile industry is a traditional pillar industry of the national economy in China. The strategic goal of Chinese innovation is to upgrade and transform traditional industries and make them develop in coordination with high-tech industries, so as to realize sustainable industrial development. At the core of industrial sustainable development, the innovation of the textile industry in China has become an important issue worthy of attention. Based on resource-based theory and signal transfer theory, the relationship between government funding, R&D models and the innovation performance of the Chinese textile industry is studied. The results show that government funding has a significant, direct promoting effect on the internal R&D and science-based cooperation of enterprises. Government funding indirectly promotes market-based cooperation through internal R&D. The promoting effect of internal R&D on innovation performance is greater than that of cooperative R&D. Internal R&D and cooperative R&D have more promoting effects on R&D reserve performance than those on market performance. Government funding indirectly promotes innovation performance through the mediation of internal R&D and science-based cooperation. The threshold effect of cooperative R&D indicates that only when the cooperative R&D intensity exceeds the threshold can government funding foster innovation performance more effectively. The conclusions can provide theoretical guidance for the formulation of innovation policy.

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“…Thus, as a firm grows, it often does not naturally increase the amount of resources, but deliberately limit them according to external conditions. These often occur in Korea [65] because various exclusive benefits such as government R&D budget to overcome the barriers of risky R&D projects or to stimulate internal R&D, tax exemption, and employment benefit are offered to small firms meeting the statutory requirements [66,67].…”

Section: Groups (Nn Pn Np and Pp)mentioning

confidence: 99%

Dynamic Technological Diversification and Its Impact on Firms’ Performance: An Empirical Analysis of Korean IT Firms

2017

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Abstract:This paper aims to analyze the influence of the technological diversification on a firm's innovation capabilities and investigates the effect of various strategies on the firm's financial performance in a technology-oriented environment. We employ the entropy measurement to calculate technological diversification with 2095 patents, which are applied from years 2009 to 2011 by 507 firms that have participated in Korean government Information Technology (IT) Research and Development (R&D) supporting programs. In our framework, a firm should not diversify among the related technology fields, but should concentrate on a specific technology to reinforce the competitive advantage. However, in the case of the firms with sufficient resources, increasing technological diversification among the unrelated technology fields plays a key role on the firms' performance. Furthermore, the degree of the technological diversification should be adjusted dynamically in compliance with the change of a firm's innovation capabilities. Therefore, these results suggest that a firm should develop differentiated competitiveness through specialization by prioritizing its capabilities, and then exploit unrelated technological diversification to search for new opportunities.

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The effect of risk-sharing government subsidy on corporate R&D investment: Empirical evidence from Korea

Cited by 115 publications

References 20 publications

The Impact of Government Subsidies on Private R&D and Firm Performance: Does Ownership Matter in China’s Manufacturing Industry?

The Impact of Government Subsidies on Private R&D and Firm Performance: Does Ownership Matter in China’s Manufacturing Industry?

Relationships among Government Funding, R&D Model and Innovation Performance: A Study on the Chinese Textile Industry

Dynamic Technological Diversification and Its Impact on Firms’ Performance: An Empirical Analysis of Korean IT Firms

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