Abstract:

This study estimates factors that lead to the government's direct investment for R&D in different types of industries depending on employment scales and technology levels.
We analyzed that what factors made the government directly invest in research and development by using a total of 18,272 company panel data, which are not limited to specific industries or government-led research and development (R&D) programs.

The results showed that this study estimated the factor in inducing government's direct investment for R&D by the scale of the number of employees. First, for SMEs having less than 300 employees, the number of researchers was a factor in inducing government's direct investment for R&D, whereas SMEs' own R&D expense was a crowding-out factor. In particular, the smaller number of employees increases the crowding-in effects of researchers and the crowding-out effect of the company's own R&D expenses. Second, for major companies having more than 300 employees, its own R&D expenses and sales amount were crowding-in factors of government's direct invest for R&D.

Keywords:

SMEs, Research and Development, Government’s R&D investment, R&D effect, trigger factor, substitute factor.