Reform of the Patent Rights System and Its Impact on R&D Activities in Korea: The Case of the Electronics Industry

This paper examines whether the 1994 Korean patent reform effectively induced more R&D activity in the Korean electronics industry using unbalanced panel data from 1990-2006. The empirical results show no evidence that the patent reform stimulated increased R&D activity, and that the observed increase of R&D investment is mostly attributable to firm-specific characteristics,including firm size, capital intensity, and competitive pressure or technological opportunities from other firms’ R&D investments within the industry. Small firms, however, are more responsive to competitive pressure or technology opportunity than large firms.