Effects of Internationalization on Innovation in the Service Industry: Evidence from Korea

Journal of East Asian Economic Integration (JEAI), Vol. 18, No. 4 (December 2014) 339-366

28 Pages Posted: 6 Jan 2015 Last revised: 6 Nov 2016

See all articles by Jaeho Lee

Jaeho Lee

Kyung-Hee University - Department of Economics

Ji-Hwan Lee

College of Business, Korea Advanced Institute of Science and Technology (KAIST)

Baeho Choi

Korea Development Bank

Date Written: December 30, 2014

Abstract

This paper examines the impact of internationalization on the product, process and organizational innovations of Korean service firms. Despite the increasing importance of the service sector and the discrepancies in the natures of the manufacturing and service industries, the internationalization-innovation link in the context of service firms has rarely been examined empirically on a large sample. Based on the results of the logistic regressions using the 2006 Korean Innovation Survey data, we found that Korean service firms’ international expansion is significantly and positively associated with their product and organizational innovations. In addition, the magnitude of the estimates in our models revealed that internationalization has a greater impact on product innovation than on process or organizational innovation.

Keywords: Internationalization, Export, Innovation, Service Industry, Korea

JEL Classification: M16, L8, O03

Suggested Citation

Lee, Jaeho and Lee, Ji-Hwan and Choi, Baeho, Effects of Internationalization on Innovation in the Service Industry: Evidence from Korea (December 30, 2014). Journal of East Asian Economic Integration (JEAI), Vol. 18, No. 4 (December 2014) 339-366, Available at SSRN: https://ssrn.com/abstract=2545734

Jaeho Lee

Kyung-Hee University - Department of Economics ( email )

Seoul 130-701

Ji-Hwan Lee (Contact Author)

College of Business, Korea Advanced Institute of Science and Technology (KAIST) ( email )

85 Hoegiro, Dongdaemoon-gu
Seoul 02455
Korea, Republic of (South Korea)

Baeho Choi

Korea Development Bank ( email )

16-3 Yeouido-Dong, Yeongdeungpo-Gu
Seoul, 150-973
Korea, Republic of (South Korea)

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