Should the Government Regulate or Support?: Answer from Korean Manufacturing SMEs


  • Dong-Seop Sohn
  • Jung-Soo Lee
  • Jung-Tak Min
  • Yun-Bae Kim


The purpose of this study is to investigate the effect of R&D support and regulatory barriers on the technology innovation of SMEs in order to induce technology innovation in SMEs. We conducted empirical studies to overcome them. Using the STEPI technology innovation survey data, 1,223 small and medium-sized manufacturing companies conducted logistic analysis, negative binomial regression analysis, and 3SLS (Three Stage Least Squares) analysis. Small and medium enterprises were divided into industrial type (high technology industry, low technology industry). The results of the analysis are as follows: First, there is a real technology innovation effect even considering the creation of government R&D support. Second, the regulation has a positive effect on technology innovation and supported Porter's theory. Third, it was confirmed that there are differences in the influence of industrial type and innovation performance. Fourth, this study attempted to analyze the impact on technological innovation according to industry type, which can be an important basis for encouraging technological innovation by preparing policies appropriate for the promotion of SMEs. This study will further solidify the basis of government support for SMEs by solving the question of whether it is effective for government support. In addition, the policy implications were to derive a positive effect on government regulation so that it can operate as an effective regulation rather than a way to eliminate it