• ISSN: 2010-023X (Print)
    • Abbreviated Title: Int. J. Trade, Economics and Financ.
    • Frequency: Bimonthly
    • DOI: 10.18178/IJTEF
    • Editor-in-Chief: Prof.Tung-Zong (Donald) Chang
    • Executive Editor: Ms. Cherry L. Chen
    • Abstracting/ Indexing:  ProQuest, Crossref, Electronic Journals Library , EBSCO, and Ulrich's Periodicals Directory
    • E-mail: ijtef@ejournal.net
IJTEF 2015 Vol.6(3): 181-185 ISSN: 2010-023X
DOI: 10.7763/IJTEF.2015.V6.466

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The Role of Venture Capital on Innovation in the Korean Biotechnology Industry

Byung Kuk Sohn and Kyung-Nam Kang
Abstract—Venture capital financing is generally considered as the most suitable external financing mode for New technology based SMEs, such as biotech SMEs. However, the way in which venture capital investments influence a firm’s innovation performance is not as certain. In this paper, we empirically analyzed the impact of venture capital investments on networks and innovation performance in Korean biotech SMEs. Venture capital investment was positively associated with downstream partnerships, supporting Hypothesis 1-2 (β=0.29, p<0.001). Inter-firm collaborations were positively correlated with a firm’s innovation performance, supporting Hypothesis 2 (β=0.18, p<0.10 in upstream partnerships, β=0.61, p<0.01 in downstream partnerships). This study showed the mechanism of venture capital investment influencing innovation by promoting downstream collaborations.

Index Terms—Venture capital financing, biotech SMEs, downstream collaborations, innovation performance.

Byung-Kuk Sohn is with the Management of Technology, Sungkyunkwan University, Gyeonggi-do 440-746, Republic of Korea (e-mail: wizardkuky@gmail.com).
Kyung-Nam Kang is with Korea Institute of Intellectual Property, Gangnam-gu, Seoul 135-980, Republic of Korea and is also with Konkuk University, Gwangjin-gu, Seoul 143-701, Republic of Korea (tel: +82-2-2189-2629; fax: +82-2-2189-2699; e-mail: bio@kiip.re.kr).


Cite: Byung Kuk Sohn and Kyung-Nam Kang, "The Role of Venture Capital on Innovation in the Korean Biotechnology Industry," International Journal of Trade, Economics and Finance vol.6, no.3, pp. 181-185, 2015.

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