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The effect of credit guarantees on R&D investment of SMEs in Korea

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  • The effect of credit guarantees on R&D investment of SMEs in Korea
  • Heshmati, Almas
  • Institute for the Study of Labor


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Title The effect of credit guarantees on R&D investment of SMEs in Korea
Similar Titles
Material Type Reports
Author(English)

Heshmati, Almas

Publisher

Bonn:Institute for the Study of Labor

Date 2013-12
Series Title; No IZA Discussion Paper / 7851
Subject Country South Korea(Asia and Pacific)
Language English
File Type Link
Subject Economy < Financial Policy
Industry and Technology < Science/Technology
Holding Institute for the Study of Labor

Abstract

Korean government has invested significant amount of resources through credit guarantee funds to promote SMEs survival, performance and R&D investment. This study attempts to identify determinants of provision of credit guarantees and estimate their effects on firms R&D expenditures. The relationship between duration of credit and firm’s survival and performance is also investigated. Account is made for heterogeneity by various characteristics of firms when looking at credit guarantee and in-house R&D investment relationships. This study results in identification of factors that enhances efficiency of funds and their effects on firms’ R&D investment behavior. It enables feedback effects on the public funds selection of firms guaranteed. A number of policy measures are proposed to promote a better balance between public and private investments to reduce the risk of business failure.