The Lasting Effects of R&D Support on Technology-Driven Startups: Insights from South Korea

The study assesses a 2015 research and development (R&D) support program initiated by the South Korean Ministry of Science and ICT (MSIT) to provide funding for high-tech startups. This analysis investigates the effects of a governmental research and development support initiative in South Korea aimed at high-tech startups in 2015. Employing a Regression Discontinuity Design (RDD) grounded in project scores given by an expert panel, we assess the program's influence on innovation and corporate success over 10 years. A more thorough analysis of manipulation is carried out in, which provides estimates of the density function and closely examines the region surrounding the cut-off. The findings indicate that the subsidies had a substantial impact on enhancing investments in intangible assets and contributed positively to the success of firms. Nonetheless, the program did not result in a quantifiable rise in patent activity. Our findings demonstrate how crucial R&D subsidies are for promoting business expansion and performance, especially in high-tech industries. Government support for research and development in innovation has significantly boosted employment, total sales, and the proportion of innovative sales for seven years. The findings contribute to the current literature on the impact of government R&D support in fostering innovativeness and economic growth. The study shows that public R&D funding effectively boosts business performance and intangible investment, which drives long-term growth and innovation. We recommend that future researchers uncover the exact model under certain market conditions, as suggested in previous studies.