Title: An econometric model for evaluating success/failure of an R&D project: the case of Korea

Authors: Johng-Ihl Lee

Addresses: Department of International Trade and Commerce, Namseoul University, Cheonan, Choongnam, 331-707, Korea

Abstract: The financial crisis in 1997, which led Korea to the IMF management system, had offered the realisation of the technological competitiveness, owing to the significant increase of the government R&D budget from 3.5 trillion won in 1999 to 12 trillion in 2009. This paper examines the impact of government R&D incentives on the technological outcome by analysing firms| investment behaviours subject to the Korea|s technology development program. Based on a mathematical model considering uncertainty and consequently introduced hypotheses, an econometric model of technological outcomes is estimated on a project level with cross-sectional data from Korea|s R&D program. With a single equation approach, it is found that the structure of investment is a far more significant factor than the total amount of investment and that cash investment is a positive factor and in-kind for negative. The larger the number of institutions involved in a project, the less likely it leads to success, and meeting the proposed deadlines without postponing is estimated to be a good barometer to predict the successful outcome of an R&D project.

Keywords: R&D projects; project success; project failure; econometric modelling; probit; project evaluation; Korea; government R&D; R&D incentives; technological outcomes; research and development; mathematical modelling; uncertainty; investment behaviour; technology development; government incentives.

DOI: 10.1504/IJITM.2011.037763

International Journal of Information Technology and Management, 2011 Vol.10 No.1, pp.69 - 79

Published online: 27 Dec 2010 *

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