Purpose: This study is to analyze the impact of the government's R&D subsidy support for software companies on job creation. In particular, the net employment effect of the business is estimated by comparing differences in employment between beneficiary companies and non-beneficiaries that received the government R&D subsidy support. In the case of using data that distinguishes between companies that have actually received subsidies from those that are not, more significant results can be performed than simply analyzing the relationship between the government R&D subsidy, expenditures, and employment, through which the government’s policy on subsidies support projects.
Research design, data, and methodology: Data on the beneficiaries and non-beneficiaries of the government R&D subsidy support for three years from 2014 to 2016 were collected. The PSM method is used to determine the employment effect of the government R&D subsidy support for beneficiary and non-beneficiary groups. Companies that received technical funding differ in whether or not they are supported during the period 2014-2016. Thus, after classifying the beneficiary firms and non-beneficiary firms that received R&D funding for SW companies by using PSM, the employment effects of SW companies were identified using DID.
Results: The ATT estimate from 2014 to 2016 showed a significant positive, confirming that the government R&D subsidy support has the employment effect of SW firms. As a result of ATT, the government R&D subsidy support showed the largest and most significant employment effect in 2015. The results of DID analysis of 2014-2015 had a greater employment effect than 2015-2016, and the cumulative of 2014-2016 was also statistically significant.
Conclusions: The government R&D subsidy support for SW firms is creating jobs of company's R&D manpower. It was proved that the beneficiary firms increased production through R&D and had the effect of increasing employments in terms of production increase. Therefore, employment-friendly R&D support policies for SW firms have a policy effect.