This paper tries to analyze how different types of financial systems affect R&D efforts and the supply of R&D funds. In doing so, this paper uses a simple theoretical model and empirical analyses for OECD countries. It turns out that market-based finance is better for mobilizing funds and providing funds for wider range of R&D projects, while bank-based finance is better for maximizing R&D efforts and managing inter-temporal risks. This implies that market-based finance is more appropriate for earlier stage projects in which availability of funds is crucial, whereas bank-based finance is better for post-middle stage projects. This results are backed up by empirical analyses for OECD countries; countries with market-based systems tend to invest more on earlier projects, while bank-based systems seem to invest more on later stage projects.
In Korea, R&D is largely done through intra-firm finance, which is a special kind of stock-based finance, and earlier stage finance is becoming stagnated. Facing these problems, Korea needs to foster more varieties of financial methods such as a Mezzanine finance that mixes market-based and bank-based systems. It is also needed to develop the role of government with respect to search-stage R&D projects, which would produce valuable information for financial markets.
연구개발 투자의 촉진을 위한 금융시스템(Appropriate financial systems for R&D investments)
|Series Title; No||금융조사보고서 / 2007-07|
|Subject Country||South Korea(Asia and Pacific)|
|Subject||Economy < Financial Policy|
|Holding||한국금융연구원; KDI 국제정책대학원|