بررسی تأثیر یارانه دولتی ریسک اشتراک بر سرمایه گذاری شرکت های بزرگ R & D : شواهد تجربی از کره

Despite the wide belief that the high social rates of returns to R&D investment justify government subsidy policy in advanced countries, there are only limited studies about whether the R&D subsidy as a means of risk-sharing stimulates R&D investment of small and medium sized enterprises (SMEs) in developing countries. This paper empirically investigates the issue, using a unique data set on government subsidy for new technology development of Korean manufacturing firms, listed and non-listed, for the period from 2000 to 2007. The paper employs the DID estimation procedure and controls for simultaneity of the subsidy for new technology development using 2SLS and two step Tobit procedure. Our empirical results show that there is no solid evidence for crowding-out effects of the government subsidy. These results suggest that government subsidies could help SMEs to overcome the barriers to risky R&D projects through sharing R&D failure risk with government and by reducing capital costs to undertake new technology development projects, and thus the subsidy policy for new technology development seems to be partly successful in promoting the R&D investment of the Korean SMEs.

While the emphasis has been placed on export-oriented growth strategies in most developing countries, the importance of innovation and the improvement on technological efforts is recognized [1]. In particular, R&D investment in new technology development has been thought of as one of the most important factors for enhancing technological progress and thus economic growth for developed and developing countries [2]. In Korea, the nature of and incentives to firm R&D investment have been understood in the context of implementing its underlying export-led growth strategies in the market structure dominated mainly by large enterprises. In terms of their size and limited capital, the Korean SMEs (small and medium sized enterprises) have generally spent little on R&D or technology license. In general, it would be relatively easy for large firms to undertake R&D activities or to import technology from foreign sources either through joint venture or consultancy. But it is difficult for the SMEs to undertake the risky R&D projects by being financed in the market. It is more difficult for the SMEs to get external equity finance in the absence of well-established capital markets. Without efficient capital markets, the external costs of capital might be higher especially to the SMEs than internal costs of capital [3] and [4]. It is due to asymmetric information between inventor and investor about the likelihood of success, moral hazard problem which may arise from separation of ownership from management, and tax considerations that drive a wedge between external and internal financing by retained earnings. For these reasons firms should be more dependent on internal financing, which makes the SMEs exposed to the higher default risk. High default risk and high capital costs would cause private SMEs to appropriate less return and to face greater risk than society does. The shortfalls of the private expected outcomes from the expected returns of the society reflect the appropriability problems. On the other hand, R&D subsidies to the SMEs could help overcome barriers to technology-enhancing but risky R&D projects either by lowering failure risk associated with the underlying R&D projects or by reducing capital costs to undertake the R&D projects. The direct R&D subsidies to the SMEs would facilitate risk management by sharing with government the risk nature of the R&D projects and by reducing failure risk against the development of new products and their commercialization. The default risk and thus market failure can be partially alleviated by government policies such as subsidy and tax incentive policies. At the macroeconomic level, an increase in R&D investment encouraged by government policy can induce innovation and new technology development and thus promote economic growth. As the endogenous growth theory has argued, R&D investment could create new scientific and technological knowledge which is an important source of economic growth. Many empirical studies have reinforced the message. If new technological knowledge created by R&D investment is an important driver of economic growth, then technology-enhancing R&D policy would be good for inducing economic growth, which may be a critical issue in Korea and in most of developing countries as well. Despite the importance of government R&D policy, there are few empirical studies on the effectiveness of the government policy in newly industrialized countries (NICs) [3] and [5]. This paper empirically investigates the effect of government R&D subsidy as a means of risk-sharing with the SME, using a unique data set on government R&D subsidies for the Korean manufacturing firms in the period 2000–2007. To do so, we employ both the DID (difference-in-deference) methodology to mitigate a sample selection bias [6], [7] and [8] and 2SLS (two stage least squares) and two step Tobit procedure to control for a simultaneity bias of the government subsidy for new technology development [9] and [10].1 DID estimator can mitigate the selection bias caused by the counterfactual outcomes, using non-subsidized firms to evaluate what would have happened to subsidized firms if they had not been subsidized by the government [11]. The DID estimator, nonetheless, could have the potential simultaneity problem which may arise when the probability of being selected by government is correlated with error terms. To eliminate such a simultaneity bias, either 2SLS or GMM estimator will be used [12] and [13]. The issue about whether government R&D subsidies to SMEs crowd out corporate R&D investment can have very important policy implications for Korea and other NICs as well. If scientific knowledge and new technology created by R&D investment were an important source of economic growth, then government subsidy should be good for creating scientific knowledge and new technology development and inducing economic growth particularly in developing countries. However, if the subsidy for new technology development crowded out private R&D spending, government subsidy policy should not be appropriate.

Advancements in science and technology are drivers of technological change as reflected in total factor productivity growth. R&D investment is a key indicator of advancements on science and technology. The relationship between R&D investment and technological change is as important at the microeconomic level of firm behavior as it is at that macroeconomic level of economic growth. At the microeconomic level technology innovation and management as outputs of R&D investment would be the engine of the enterprise development and growth. Thus, R&D subsidy should be an important government policy tool directly related to economic growth and secondarily related to global competitiveness of firms. This paper empirically examines whether the government R&D subsidies to the SMEs for promotion of innovation and technology development in Korea substitute corporate R&D investment, using a unique panel data set on Korean manufacturing firms and government subsidies during the period 2000–2007. To do so, we employ both the DID methodology and the 2SLS procedure to control for the selection and simultaneity bias of the government subsidy for new technology development and transfer. The subsidy effect can be measured as the average change between the R&D investment for the subsidized firms and that for the non-subsidized firms which would have spent if they had not received the subsidy. Our empirical results show that there is no robust evidence for crowding-out effects on the Korean manufacturing firms during the sample period. Government R&D subsidies in Korea induce additional company-funded R&D activities, rather than displace private R&D investment of the SMEs. This finding implies that government intervention can enhance corporate investment in innovation process of the SMEs and thus it could be justified in Korea and in developing countries as well. The positive effects of Korea's R&D subsidy for new technology development and transfer imply that the R&D subsidy can help SMEs to overcome barriers to innovation and technology development either by lowering technical risk associated with the underlying R&D or by reducing capital costs to undertake the risky R&D projects. The government subsidies to the SMEs can facilitate their management over technical risk of the underlying R&D projects and the failure risk for the development of new products and their commercialization. Government R&D subsidies to the SMEs can induce more external investment through reducing biases of investors from subjective judgment and from heuristics of R&D investments. Our empirical findings suggest that the Korean government R&D policy should play an important role in enhancing new technology development and technology transfer across industries by sharing the essential risk of the R&D projects with the SMEs. In this context, the Korean R&D policy seems to be partly successful to stimulate corporate R&D investment and thus to create scientific knowledge and new technology as a prime driver of economic growth.