What Types of Government Support on Food SMEs Improve Innovation Performance?

Harry Jeong, Kwangsoo Shin, Seunghyun Kim and Eungdo Kim
Additional contact information
Harry Jeong: Department of Biomedical Convergence, College of Medicine, Chungbuk National University, Chungdae-ro 1, Seowon-gu, Cheong-ju 28644, Chungbuk, Korea
Kwangsoo Shin: Department of Biomedical Convergence, College of Medicine, Chungbuk National University, Chungdae-ro 1, Seowon-gu, Cheong-ju 28644, Chungbuk, Korea
Seunghyun Kim: Office of Innovative Institution Research, Science and Technology Policy Institute, Building B, Sejong National Research Complex, 370 Sicheong-daero, Sejong 30147, Korea
Eungdo Kim: Department of Biomedical Convergence, College of Medicine, Chungbuk National University, Chungdae-ro 1, Seowon-gu, Cheong-ju 28644, Chungbuk, Korea

Sustainability, 2021, vol. 13, issue 16, 1-23

Abstract: Since small and medium enterprises (SMEs) play an important role in economic development, the government implements various supports. Nevertheless, SMEs have difficulties in gaining a competitive advantage in the market owing to lack of capital and capacity. Accordingly, SMEs try to secure a competitive advantage through innovation. Government support is necessary for the innovation of SMEs, and it is essential for food SMEs as well. Whether government support for firms can affect firm’s innovation is still a matter of debate. In particular, it is necessary to empirically investigate the relationship between government support and innovation for SMEs in latecomers to the food industry such as Korea. Therefore, this study conducted an empirical study on the factors that determine the innovation performance of food SMEs by government support. This study used a two-stage regression model. The government support does not unilaterally affect innovation performance, but rather, an endogeneity problem occurs through the interaction between them. This study examined the interrelationships between variables for a clear estimate of government support. Before two-stage regression, this study used the ordered logistic regression to determine the instrumental variables. Each instrumental variable was estimated for the seven types of government support that are normally implemented. The result suggests that the government certification support is effective in improving the innovation performance of food SMEs. This study is useful to establish innovation strategies for supporting food SMEs’ innovation in late-coming countries.

Keywords: food industry; SMEs; government support; latecomer; innovation performance; two-stage regression; ordered logistic regression (search for similar items in EconPapers)
JEL-codes: O13 Q Q0 Q2 Q3 Q5 Q56 (search for similar items in EconPapers)
Date: 2021
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

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