ABSTRACT

In fast-paced technological change, government R&D support has been enhanced in relation to new information and communications technology (ICT). The purpose of this paper is to investigate the different effects of government support on emerging and mature ICT sectors using the first difference autoregressive model. Technological opportunity is used to measure sector characteristics, which leads to an increase in government support effects in emerging ICT sector compared with the mature ICT sector. Additionally, government support has a more stimulating effect on private R&D expenditure for young firms than for incumbent firms. Interestingly, when R&D subsidies are divided into research and development, research subsidies for young firms are effective only in the emerging ICT sector, unlike the other ICT sectors. This study suggests that government should enhance R&D support to young firms, especially in emerging ICT sector with high technological opportunity, as broadening the government R&D support rationale and strategies study based on the industry evolution theory.