The Impact of Technological Innovation by Korean IT Companies on ESG Performance

Technological innovation activities of a company drive product innovation, which enhances the company's competitiveness and facilitates sustainable management. This study analyzed the impact of technological innovation activities on ESG performance. The results of the study are as follows. First, technological innovation activities were found to have a significant positive (+) impact on a company's ESG performance. Second, among the technological innovation activities, R&D expenditures treated as costs were shown to have a significant positive (+) influence on ESG performance. This result can be attributed to the much higher proportion of R&D investments treated as costs compared to those treated as intangible assets. Third, it was found that companies with a higher foreign ownership ratio and larger firm size showed a significant positive (+) impact of technological innovation activities on ESG performance. This suggests that larger companies are more efficient in managing technological innovation activities. In conclusion, IT companies actively engaged in technological innovation can secure competitiveness, improve business performance, and ultimately enhance their ESG outcomes. Therefore, it is evident that continuous technological innovation activities are necessary to maintain the competitiveness of the IT industry. Furthermore, this study is expected to contribute to IT companies maintaining their competitiveness and achieving sustainable management through technological innovation activities.