Government Policy Support and the Performance of Technology-Based Start-Ups: Evidence from South Korea
Abstract
This article examines the impact of policy support such as education and consulting, facilities and space, commercialization, R&D, and policy funds on the financial and non-financial performance of technology-based start-ups. The article attempted an empirical analysis through a questionnaire to present implications and suggestions to improve the effectiveness of technology start-up support policies. The surveyed companies were limited to those founded within the previous seven years and belonging to the manufacturing and knowledge service industries that correspond to the technology start-up companies defined by the Ministry of SMEs and Start-ups in South Korea. Policy support has a multidimensional effect on start-up performance, but education and consulting have no significant impact. Facility and space support have an insignificant effect on start-up performance, with a positive effect on non-financial performance overall but a negative effect on early companies. Commercialization support positively impacts non-financial performance but negatively impacts organizational performance. Government R&D support positively impacts overall financial performance, and non-financial performance is positive for early companies. Policy funding has a positive effect on non-financial performance overall, and financial performance is positive for early companies. Limited facility and space support moderates the growth stage. Support for facilities promotes non-financial performance, but support for early companies negatively impacts performance. This study analyzed the effect of policy support on financial and non-financial performance of technology start-up companies. The study implies the necessity to establish and implement differentiated strategies for each technology start-up support policy tool. This study comprehensively reviews the impact of policy support such as education and consulting, facilities and space, commercialization, R&D, and policy funds on the financial and non-financial performance of technology-based start-ups, thus overcoming the limitations of previous studies. This comprehensive analysis is expected to have important implications for presenting the policy direction for the government to support entrepreneurship.
Keywords: technology-based start-ups, government policy support, R&D, firm performance, technological innovation, entrepreneurship.
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