R&D investment and the government's R&D policies of electronics industries in Korea and Taiwan

Focusing on the electronics industry, this paper verifies and compares how bipolar R&D policy contributed to growth in productivity in Korea and Taiwan. Two implications are derived from the empirical results. First, in Korea, government's business group-centered R&D policy encouraged private R&D expenditure rather than public R&D infrastructure. Second, and in contrast, publicly funded R&D infrastructure capital stock, in recent years, significantly induced private R&D expenditures of Taiwanese electronics firms. These two implications suggest that there are various potential ways to cope with externalities associated with R&D investment in emerging countries. (C) 2006 Elsevier Inc. All rights reserved.