earticle

영어

A country`s economy is growing with expansion of production for goods and service and major causes of this expansion can be observed within the availability of inputs as resources and introduction of production technology. Therefore, national economy is stimulated by increasing amounts of capital and labor inputs, input productivity due to new technology and a efficient structure to adopt inputs for production. However, it is urgent to establish and implement a new policy if promotion of input productivity resulted from a new technology is limited by scarcity of natural resources. Also, growth of individual company as microeconomic unit depends on above-mentioned input productivity which is affected from availability of technology and market condition. There have been many debates about the relationship between input productivity and technology advancement. J.A. Schumpeter is the first scholar who regards economic subject as major contributor to technology advancement. He argued that innovative enterpreneurship and displaying enterpreneur`s ability are motive powers conductive to development of capitalism through a course of creative destruction. Discussing about innovation, Schumpeter raised two hypothesis to link with market structure as follow: First, there is a positive relationship between degree of innovation and monopoly power. Second, Large firms are more innovative than small firms. There are big arguments among many scholars including J.K. Galbraith, A. Phillips, J. Schmookler and K.J. Arrow about those two hypotheses. This paper provides the understanding of Schumpeterian hypotheses and pursuing of theoretical approach for decision making of policy with study of the relationship between R. & D. and cooperative profit by plant size within the context of innovation and market structure. This kind of discussion about innovation provides the great implications for Korean economy in second stage of development.