The Government R&amp;D Funding and Management Performance: The Mediating Effect of Technology Innovation

Seunghoo Jin,Kangwon Lee

doi:10.3390/joitmc6040094

Abstract

Korea’s small- and medium-sized enterprises are desperate to improve their performance through engaging in technological innovation, due to the fierce competition prevalent in a low growth economic environment. However, most small- and medium-sized enterprises are having difficulty responding to changes in the economic environment due to the challenge of developing their own technologies and their limited resources. The aim of this study is to assess whether government financial support for R&D aimed at small- and medium-sized enterprises has contributed to improvements in their business management performance. The sample of this study was comprised of 105 KOSDAQ-listed small- and medium-sized enterprises with experience in technology development. The empirical analysis was conducted on the basis of the mediating effect measurement method of Baron and Kenny (1986). It was found that company technological innovation capabilities have a positive effect on management performance, and in particular, that the majority of companies that received government financial support for R&D have improved their management performance. Therefore, it is recommended that small- and medium-sized companies take an active part in various government R&D financial support programs and make efforts to strengthen their technological innovation in areas such as their product service and process innovation capabilities.

Highlights

The proportion of small- and medium-sized companies is a significant factor in the domestic industry of Korea, considering the large number of businesses and the number of people they employ
The technology statistics for the six years from 2012 to 2017 of 105 companies whose data are in the Korea Institute of Science and Technology Policy database were analyzed, on the basis of data for 105 corporations
This study found that the level of technological innovation of small- and medium-sized enterprises (SMEs) and their access to government R&D financial support had a positive effect on management performance, and that their technological innovation capabilities played a mediating role

Summary

Introduction

The proportion of small- and medium-sized companies is a significant factor in the domestic industry of Korea, considering the large number of businesses and the number of people they employ. The government has been supporting the development of small- and medium-sized enterprises (SMEs) and sustainable ecosystems in terms of funding, sales, manpower and R&D. Companies have been trying to improve their business management performance and international competitiveness through various types of innovation activities. One constraint is that continuing technological innovation, which can add value in a fierce competitive environment, may be difficult to achieve in the short term due to costs and lack of resources. It can be achieved through a focus on the strategic and managerial capabilities of the organization, as well as its overall capabilities [2]. In the highly innovative situation that normally arises in the initial stage of a firm’s existence, an “open-and-closed”

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