Two different effects of R&D on innovation in South Korea: evidence from the firm level data
by Daewoong Choo
International Journal of Technology and Globalisation (IJTG), Vol. 7, No. 4, 2014

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.

Online publication date: Wed, 14-Jan-2015

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