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This paper investigates whether government support for small and medium-sized enterprises (SMEs) in an emerging economy creates their reluctance to grow, which is analogous to the Peter Pan Syndrome. We test our hypotheses by regression analyses on a sample of 2,779 firms from a unique Korean Innovation Survey dataset from 2005 to 2007. Our empirical results show that SMEs tend to hinder their growth as they approach SME eligibility thresholds beyond which public support ceases. Such a tendency intensifies as SMEs grow closer to the employment-size-contingent SME eligibility threshold and as they receive more public support. In addition, the likelihood of the Peter Pan Syndrome is conditioned by both firm- and industry-specific characteristics. As government support for SMEs based on size-contingent eligibility criteria has a detrimental side-effect, other merit- or effort-based criteria should be considered. It is also desirable to reduce the opportunity cost involved in graduating from SMEs. [ABSTRACT FROM AUTHOR]

This study aims to examine whether R&D cooperation with competitors promotes firm R&D investment. Although some theoretical models and anecdotal examples imply that firms may be discouraged from investing in R&D that arises from R&D cooperation with competitors, there are relatively few empirical studies that analyze the relationship between R&D cooperation with competitors and firm innovation input, compared to the theoretical models, and most empirical studies argued that R&D cooperation causes firms to invest in R&D more intensively. This study aims to fill this lacuna in the existing literature by empirically investigating the relationship between R&D cooperation with competitors and firm R&D intensity, primarily focusing on moderating factors influencing a degree of spillovers among firms, or a firm's ability and an incentive to utilize spillovers, which shape the relationship. Using a panel data set of Korean manufacturing firms, we find the following: First, firm-specific absorptive capacity has a positive moderating effect on the relationship. Second, a firm-specific employee turnover rate has a negative moderating effect on the relationship. Third, firm-specific market power has a negative moderating effect on the relationship. Fourth, after controlling for the moderating effects, we find that the stand-alone (or direct) effect of R&D cooperation with competitors on firm R&D intensity is negative. Finally, the stand-alone effect and the moderating effects are more pronounced for firms operating in high-technology industries. We argue that R&D cooperation with competitors per se may not provide firms with the incentive to increase their R&D investment due mostly to opportunism and low appropriability caused by the increased spillovers among competitors. In addition, public sectors and firms should consider each firm's ability and an incentive to utilize increased spillovers caused by R&D cooperation with competitors. [ABSTRACT FROM AUTHOR]

This paper examines whether there exists a quality difference between government-funded and privately-funded patents. Furthermore, to the extent that there is a quality difference, this paper investigates under what conditions such a difference is particularly more pronounced. Using a unique dataset of Korean manufacturing firms during the period of 2006-2010 that provides project-level information on public R&D subsidies, we find the following. First, for the pooled sample of patents, there exists a quality difference between government-funded and privately-funded patents. Overall, the quality of government-funded patents is higher than that of privately-funded ones. Second, within each firm, quality differences between government-funded and privately-funded patents are more likely to be positive for large firms than small ones. Third, within-firm quality differences between government-funded and privately-funded patents are more likely to be positive for firms with a large technological knowledge base, particularly when they perform more exploratory, rather than exploitative, R&D projects with public R&D subsidies. [ABSTRACT FROM AUTHOR]

This paper investigates the conditioning role of R&D employee training in the effect of the stock of technological knowledge on firm R&D productivity. We suggest that the development of R&D human capital through training enhances firm‐specific technological competence, thereby enabling firms to better utilize their stock of technological knowledge as a source of technological opportunities. Specifically, while a trap of path dependency may hamper the proper utilization of the firm‐specific stock of technological knowledge, R&D employee training reinforces the standing‐on‐the‐shoulders effect of the stock of technological knowledge, thereby offsetting, at least partially, its fishing‐out effect due to depleting technological opportunities. Using panel data of Korean manufacturing firms, we show that R&D employee training positively moderates the effect of the stock of technological knowledge on firm R&D productivity. Furthermore, we suggest several factors that influence the positive moderating effect of R&D employee training such as the degree of knowledge sharing among R&D employees within each firm, the strength of industry R&D appropriability, and the industry R&D intensity. [ABSTRACT FROM AUTHOR]

The relationship between a business groups share in a sector and the sectors innovative performance is examined. The key theoretical arguments and their empirical implications are discussed. The data and measures are examined and statistical analysis is conducted.

This study examines whether government support for small and medium‐sized enterprises (SMEs), aimed at stimulating their growth, achieves its intended goal. We argue that government subsidies create the incentive for SMEs to remain small in order to keep receiving such support and thus SMEs are reluctant to grow. We call this phenomenon the Peter Pan syndrome. Using a dataset of Korean manufacturing firms during the period of 2010–2012, we find that the Peter Pan syndrome indeed exists and that the likelihood of the Peter Pan syndrome is conditioned by factors that influence their incentive to remain as SMEs. [ABSTRACT FROM AUTHOR]

This article investigates first-mover and early-entrant advantages in terms of market share and its growth by analyzing a unique panel data set of Korean manufacturing firms. Specifically, this article examines the existence and persistence of first-mover and early-entrant advantages across different technological regimes. We find that these advantages are influenced by characteristics of the firms, as well as, of the technological regimes under which they operate. In general, early entry into a market benefits a firm in terms of the size and growth rate of its market share. Early entrants, including first movers, have higher market shares, except in regimes with high technological opportunity and low R&D appropriability. However, first movers are disadvantaged in terms of market share growth, except in regimes with low technological opportunities and high R&D appropriability. We also find that firm-specific competences in R&D and advertising help to maintain (attenuate) first-mover and early-entrant advantages (disadvantages). [ABSTRACT FROM PUBLISHER]

This paper studies the functional specialization of SMEs' technological competence and its moderating role in the effect of external R&D on their innovative performance. Technological competence consists of many functional dimensions such as basic research, product architecture, process construction, testing, and evaluation, which constitute a sequence of innovation tasks. The specialization of technological competence allows SMEs to utilize economies of specialization in R&D, enhance their bargaining power and appropriability conditions in the process of external R&D, and attract promising R&D partners. However, competence specialization may hamper SMEs' capabilities to coordinate and integrate diverse external R&D projects. Using a sample of SMEs in Korean manufacturing industries, we find the following results. First, competence specialization positively moderates the effect of external R&D on SMEs' innovative performance. Second, the positive moderating effect of competence specialization diminishes as the share of external R&D increases. Third, the moderating effect of competence specialization differs across industries depending on the degree of market dominance by a few large firms (i.e., market concentration) and the novelty of technologies pursued by SMEs in each industry. [ABSTRACT FROM AUTHOR]

This paper examines the impact of group-controlling shareholders’ interests on the R&D decision of group-affiliated firms in business groups with cross-ownership structures, especially with regard to the impact of control-ownership disparities or cash-flow rights. We show that R&D intensity across group-affiliated firms, in business groups with cross-ownership structures, is higher when control-ownership disparities are low or when group-controlling shareholders have higher cash-flow rights. Particularly in publicly listed firms, we find that the cash-flow rights of group-controlling shareholders are one of the most important determinants of the R&D intensity for group-affiliated firms. [ABSTRACT FROM PUBLISHER]

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This paper extends the seminal Dorfman-Steiner (American Economic Review, 44, 826-36, 1954) theorem by putting underlying structures on the determination of market share and on the production of quality or technology. The model developed in this paper yields a demand-pull, technology-push theory of R&D, where the profit-maximizing R&D intensity (i.e., the ratio of R&D expenditure to sales) is determined jointly by consumer characteristics, represented by the elasticities of consumer value with respect to price and quality, and firm-specific technological competence or simply R&D productivity, measured as the R&D elasticity of quality or technological output. [ABSTRACT FROM AUTHOR]