Technical Innovation and Export Activities of Small and Medium-Sized Firms in Korea

Sung Hyo Hong . Soojoong Nam

Abstract
This paper empirically analyzes the technical efficiency of small and medium-sized firms’ R&D activities and the effect of the efficiency on those firms’ export performance in Korea. Theoretically, since more efficient firms tend to be more competitive in the quality or price of their products, their sales on foreign markets would be relatively higher. Especially, this trend is likely to be deepened in the 4th industrial revolution era where cutting-edge technologies (e.g., AI and big data) are emphasized. Empirical results of the paper using Korean data show that the technical efficiency of small and medium-sized firms’ R&D activities measured by the data envelopment analysis enhances their sales on foreign market. This relationship becomes more obvious as the firms become larger. However, as the size of a firm is larger, it is more likely to use technologies related with big data, cloud computing, IoT, and so on. These findings imply that the improvement of technical efficiency would gain more emphasis for the increase in the small and medium-sized firms’ sales on foreign markets as the technologies representing the 4th industrial revolution are utilized more.

Keywords technical innovation․export, 4th industrial revolution․DEA․PSM2.Sung Hyo Hong Soojoong Nam