Title: Two different effects of R&D on innovation in South Korea: evidence from the firm level data

Authors: Daewoong Choo

Addresses: Samsung Economic Research Institute, Seocho Tower, 1321-15, Seocho 2-dong, Seocho-gu, Seoul 137-955, South Korea

Abstract: Innovation can be made through two different processes or effects of R&D, which are the creative effect and the learning effect. The existing literatures have focused on foreign direct investment (FDI) as the critical method through which R&D exerts its learning effect. However, it should be noted that export activities can also offer an important source of learning - as important as FDI - and may be exceptionally meaningful for firms in countries with export-oriented economies, such as South Korea. I argue that to examine the two true different effects of R&D accurately and offer right implications for the firms, the alternative learning effect of R&D through export at firm-level should be included in a unified framework. Using longitudinal firm-level data for the period of 2000 to 2009 in South Korea, empirical tests show that the creative effect of R&D is more important than the other two learning effects in generating innovation.

Keywords: research and development; R&D; innovation; international trade; foreign direct investment; FDI; South Korea; creative effect; learning effect; export activities; exports.

DOI: 10.1504/IJTG.2014.066615

International Journal of Technology and Globalisation, 2014 Vol.7 No.4, pp.233 - 258

Received: 11 Dec 2012
Accepted: 14 Jan 2014
Published online: 14 Jan 2015 *

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