Comparison of determinants for standards activities of Korean firms in manufacturing and service sectors

Summary

This paper compares the determinants of standards activities between manufacturing and service firms in Korea. Dependent variables are standands management, adoption of domestic standards, and usage of international standards at firm level. Independent variables include innovation activities (R&D efforts and patent application), firm size, exports ratio, network characteristics, and organizational characteristics, such as CEO attitudes on standards. We estimate the logistic regression model using the data from 636 manufacturing and 102 service firms.

The study shows that CEO concerns on standards is the most decisive factor for all the Korean firms. As for innovation activities, Korean firms, regardless of industry, implement domestic standards activities and in‐house standards management in part from R&D. Particularly, firms with low R&D intensity utilize international standards as means of technology transfer in the global market. We also found that manufacturing firms view standards activity as a technological innovation, rather than patent protection. However, service firms view it the opposite way. Although Korea is an export‐oriented country, export activity has no relation to standards activities in all Korean firms. Small‐sized enterprises in the manufacturing industry are likely to hesitate to invest their resources in standards activities. Network characteristics of industries have a positive influence on usage of international standards in manufacturing firms. Policy implications are presented in this paper as well.

Keywords:

• standards
• innovation
• determinants of standards activities
• manufacturing and service firms
• Korean industry