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Linking Innovation Barriers to Innovation Activities: Evidence from South Korea’s Manufacturing Sector

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  • Myungkoo Song

    (Korea Institute for Industrial Economics and Trade)

Abstract

This study assesses the evolving innovation climate of South Korea’s manufacturing industry by examining the relationship between perceived innovation barriers and innovation activities. Using firm-level microdata from the Korean Innovation Survey covering the period from 2020 to 2024, the analysis reveals a post-pandemic paradox: a heightened perception of innovation barriers has coexisted with a significant increase in overall innovation activity. However, this aggregate trend masks a critical divergence based on technological intensity. For firms in the low-technology sector, the results support a “revealed barrier” effect, in which heightened barrier perception stems from persistent engagement in innovation. Conversely, for firms in the high-technology sector, barriers act as genuine “Deterrents,” with financial and market constraints significantly reducing innovation success rates. These findings suggest that a one-size-fits-all policy approach is insufficient. The study concludes that innovation policy must be bifurcated: focusing on de-risking financial and market uncertainties for high-technology sectors, while addressing operational and capability frictions for low-technology sectors.

Suggested Citation

  • Myungkoo Song, 2026. "Linking Innovation Barriers to Innovation Activities: Evidence from South Korea’s Manufacturing Sector," Industrial Economic Review 022557, Korea Institute for Industrial Economics and Trade.
    • Handle: RePEc:ris:kieter:022557
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    JEL classification:

    • L60 - Industrial Organization - - Industry Studies: Manufacturing - - - General
    • O31 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Innovation and Invention: Processes and Incentives
    • O32 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Management of Technological Innovation and R&D
    • O38 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Government Policy

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