The Effect of Regulations on Technology Innovation: The Case of Korea
Wankeun Oh · Korea and the World Economy · 2024
This study comprehensively assessed how the 11 detailed regulation affects technology innovation. The Probit model is adopted to estimate the effects with the Korea Innovation Survey 2018 and the VALUESearch (financial statement database). Empirical results show that the government support system and total innovation expenditure intensity have positive impact on innovation, whereas regulations, firm age, and CR3 have negative impact. Among the detailed government regulations, those related to start-up eligibility, restrictions on private sector entry into public goods/services, regulations on industries eligible for SMEs, and price limits, in that order, have a negative impact on innovation. The fact that the largest positive and negative effects are the government support system and regulations respectively imply that government's intervention policy played a very important role.