Abstract
Government support systems are crucial for export SMEs (Small to Medium Enterprises) to cope with growing international environmental regulations. However, empirical studies show a limited research area to explore the performance of export SMEs with the help of government support systems to meet international environmental regulations. This study draws implications on the relationship between government support and corporate performance on export SMEs between two countries: Korea and China. Based on 350 samples from Korea and 320 from China, we diagnosed government supports most positively affects corporate performances in the area of eco-innovation. While education, certificate, and tax supports were less pressing areas to support, no significance was found in information support. Furthermore, we found that eco-innovation is the strongest motive to accelerate corporate performance. Finally, the support of Chinese government on firms seems to be more affective when compared to Korean government support.
Highlights
Competition in global trade between Korea and China are increasingly intensified these days
This study investigates the government support policies to counteract on the international environmental regulations for exporting small- and medium-sized enterprises (SMEs)
For Chinese samples, the textile, clothes, fur, bags, leather, and shoes manufacturers took the largest portion of the sample (68 companies, 21.3%), followed by the electronic component, computers, image, sound and communications (52 companies, 15.2%). Both Korean and Chinese companies are primarily composed of industries and companies that are quite sensitive to international environmental regulations
Summary
Competition in global trade between Korea and China are increasingly intensified these days. Global trade regulations have been reinforced from the environmental regulation triggered from the Climatic Change Convention, and from the environment-friendly paradigm initiated by EU and other advanced Western countries by means of preventive environmental regulation [2] These environment-friendly acts are wielding a strong influence on trading companies as a nontariff barrier. The studies on the details of government support areas to counteract on the upgraded global trade regulations and their effects on the company’s trade performances are quite limited. Understanding the insufficiency of research in this area, this study attempts to explore the relationship between the details of government support areas and corporate performance by scrutinizing the empirical data from Korean and Chinese SMEs. By doing this, we anticipate providing more of a hands-on implications in this field. We examine the effect of eco-innovation on corporate performance, especially companies between the two countries Korea and China, to suggest pros and cons to each country for their different government support programs
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