[Abstract]
This study analyzed the additionality effect of government R&D subsidy on manufacturing
venture firms and the moderating effect of the dependence on large firms on
the relationship between R&D subsidy and inputs and behavioural additionality. The
analysis using the survey data of venture firms from 2011 to 2016 confirmed that
venture firms received government R&D subsidies significantly increased the ratio
of R&D expenses to sales on average compared to those that did not receive R&D
subsidy. In addition, venture firms that received government R&D subsidies significantly
increased the ratio of R&D staffs with advanced degrees and the scope of partnerships
with external organizations compared to those that did not receive government R&D
subsidies. In other words, R&D subsidies have significant input and behavioural additionality
effects so that R&D investment, R&D staffs with advanced degrees, and the
range of partnerships with external organizations of venture firms increases more
than those when they do not receive R&D subsidies. On the other hand, this study
confirmed that the sales dependence ratio of venture firms on large firms negatively
moderated the relationship between R&D subsidy and input and behavioural additionality.
The results suggest that the government R&D subsidy for venture firms with an excessive
level of dependence on large firms may become invalid because the positive effects
of R&D subsidy on the venture performance are reduced as the level of dependence
on large enterprises become higher.