The Impact of Intellectual Property Ownership and Government Support on the Performance of Venture Firms

Purpose: This study examines the effects of intellectual property (IP) ownership and government funding on the sales and employment performance of Korean venture firms, aiming to identify direct impacts and signaling roles while addressing gaps in short-term performance drivers and policy effectiveness. Research design, data and methodology: Utilizing Venture Business Survey (VBS) microdata, year-by-year Weighted Least Squares (WLS) regressions with normalized survey weights, industry fixed effects, and HC3 robust standard errors were employed. Dependent variables include log(1+sales) and log(1+employment); IP and funding are in original units (cases and million KRW). Additional IP→funding models (F1: industry FE; F2: +log(employment)) and robustness checks (1% winsorization, industry-clustered SEs) were conducted. Results: Employment elasticity significantly drives sales across years, while IP's direct sales effect is insignificant in 2019–2020 and marginally positive in 2021; funding shows no short-term sales impact. IP consistently boosts employment (1.2–1.5% per case), with funding significant only in 2019. IP×funding interaction is insignificant. IP positively influences funding in 2021 post-size controls, signaling selection potential. Conclusions: Firm performance is primarily employment-driven, with IP and funding playing auxiliary roles in growth and allocation. Shift KPIs to utilization-based outcomes (e.g., commercialization, sustained employment) and implement stage-based, one-stop support integrating IP strategy and market access for enhanced policy efficacy.