PublicPrivate R

1
Public-Private RD Collaboration in Korea and
Taiwan

• The Ramifications of
• Rent-Seeking Behavior
• on Tournament Efficiency

2
Introduction

• Drafting proposals for RD funds
• Accurately assess skills, experiences, and
  intentions
• Tailored to satisfy key funding requirements
• Rent-seeking behavior can be present
• Questioning the efficiency-enhancing role of
  tournaments

3
Introduction

• Korean and Taiwanese cases
• Numerous similarities drawn over time between
  these two countries
• Still true here?
• Method of RD is becoming increasing frequent
• Contribution to long-run growth

4
Tournaments Rent-seeking

• Tournaments are effective in generating increases
  with regard to labor productivity (Lazear
  Rosen, 1981)
• Rent-seeking is ever-present in tournaments
  (Clark Riis, 1998)
• RD
• Tournament participants select innovations
  generating greatest returns (Che Gale, 2003)

5
Rent-seeking in drafting proposals (1)

• Supplement to Lazears (1996) theoretical study
  of research funding
• Public funding as a lottery
• Number of tickets is a function of effort and
  other characteristics (abilities/experiences)

6
Rent-seeking in drafting proposals (2)

• The research proposal can be influenced by
  specifications of the funding program and the
  number of tickets can be linearly related to two
  forms of effort
• There is a negative relationship between these
  two types of efforts a trade-off

7
Hypotheses

• Both types of efforts will not have similar,
  significant effects upon the tendency to receive
  public research funds in a tournament.
• Implications, if rejected
• The fund-seeker is employing a mixed-effort
  approach.
• Rent-seeking is difficult for fund providers to
  identify

8
Cases Data (1)

• Institutional similarities in Korea Taiwan
• Information exchanges between public and private
  sectors helped generate capabilities
• Funding programs continue this tradition

9
Cases Data (2)

• Korea
• Public
• MOST CoE
• IITA ITRC
• GRI ETRI
• Private
• ITEP Mid-term Technology Development Program

• Taiwan
• Public
• TDP TDPA
• GRI ITRI
• Private
• SBIR

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Cases Data (3)

• Questionnaire responses
• Subjects research directors who have received
  public research funds
• n 325 (maximum)
• Response rate 43 percent overall
• 2,903 public-private RD collaborations
  represented by this sample

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Method (1)

• Dependent variable
• pubinstig propensity for collaboration to be
  instigated by conditions of public funding
  (7-point Lickert scale)
• Independent variables
• capdifharm harmfulness of differences in
  capabilities between sectors (7-point)
• coll value of opposite sector to the respondent
  (7-point)

13
Method (2)

• Independent variables (cont.)
• getcomp benefits from complementarity between
  sectors (7-point)
• Controls
• capdif perceived extent of differences in
  capabilities
• prevpart percentage of collaboration with
  previous partners
• persties percentage of collaboration
  originating from personal ties
• Age, years at job, years in industry, industry,
  and sector

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Method (3)

• In linear relationship, capdifharm should have
  the opposite sign from both coll and getcomp
• Include effects of government oversight (overgov)
  number of times per year progress reports are
  made to an evaluating committee
• counters rent-seeking

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Conclusion (1)

• Not a discussion about effectiveness of research
  tournaments
• a discussion to test for evidence of
  rent-seeking behavior in the pursuit of funds in
  such tournaments.

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Conclusion (2)

• Oversight
• May be understood as a necessary cost of
  rent-seeking behavior.
• Fund providers are aware and compensate
• Making sense of cross-country differences
• No real consistencies among sectors
• A sampling problem or a reflection of differences
  to approaching research collaboration, both for
  fund seekers and providers?

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