earticle

영어

There is active debate about whether the government R&D subsidy induces or replaces private R&D investment in developed countries, but there are a few empirical studies on the complementarity between the public and private R&D subsidy for newly developed countries. This paper empirically investigates the issue for Korean manufacturing firms during the period 2000-2005. The paper employs the DID estimation method and controls for simultaneity of the government R&D subsidy using a two stage LS-Tobit and Tobit-Tobit procedure. Our empirical results suggest that there is no crowding-out effect of the R&D subsidy in Korean manufacturing firms. This implies that government R&D subsidies in Korea do not displace private R&D investment but instead have the complementary effect of inducing additional company-funded R&D activities.