Authors : Sung Tai Kim, Byung In Lim and Myoungkyu Kim
Abstract: Korea may be in the trap of low potential economic growth without a new economic growth strategy. We examined that how much R&D investment in Korea has on effect on patent. We estimate the knowledge production function for 28 industries in Korea using pooled OLS, fixed effect model and random effect model with panel data. The knowledge production function is a function between research and development (R&D) investment and knowledge creation. Knowledge creation is measured in terms of patent application. We found that the R&D investments have played a very important role in increasing patent applications. The elasticity of patent applications with respect to R&D investment is 0.672, implying that a 1% increase in R&D investments will result in a 0.672% increase in patent applications. It means that R&D investment shows Decreasing Return to Scale (DRTS) and that attribute of R&D investment is due to the imitativeness. The higher the capital-labor ratio, the higher the productivity of R&D investment. These implies that R&D investment increases patent and thus it helps the economy grow in Korea.
Sung Tai Kim, Byung In Lim and Myoungkyu Kim, 2017. An Estimation of Knowledge Production Function by Industry in Korea. Journal of Engineering and Applied Sciences, 12: 8796-8801.