OECD Economics Department Working Papers
Working papers from the Economics Department of the OECD that cover the full range of the Department’s work including the economic situation, policy analysis and projections; fiscal policy, public expenditure and taxation; and structural issues including ageing, growth and productivity, migration, environment, human capital, housing, trade and investment, labour markets, regulatory reform, competition, health, and other issues.
The views expressed in these papers are those of the author(s) and do not necessarily reflect those of the OECD or of the governments of its member countries.
- ISSN: 18151973 (online)
- https://doi.org/10.1787/18151973
Promoting the Financing of SMEs and Start-ups in Korea
The Korean government has made fostering a “creative economy” a top priority. The goal is to shift
Korea's economic paradigm to one based on innovation in which new start-ups and venture businesses play
a key role. However, the venture capital market is still at an early stage of development. To make venture
investment a growth driver, it is important to expand the role of business angels, activate the merger-andacquisition
market and foster entrepreneurship. A creative economy also depends on making SMEs, which
account for 87% of employment, more dynamic. The productivity gap between large firms and SMEs,
which benefit from a wide range of public support, is widening. SME policies should be streamlined and
improved to promote market-based financing and reduce the negative effects of government funding
programmes, which discourage the expansion of SMEs.
Keywords: SMEs, non-tangible collateral, KONEX, crowd-funding, entrepreneurship, venture business, venture capital investment, Korea, start-ups, business angels, KOSDAQ, credit guarantees, IPOs, creative economy, mergers and acquisitions
JEL:
L25: Industrial Organization / Firm Objectives, Organization, and Behavior / Firm Performance: Size, Diversification, and Scope;
L26: Industrial Organization / Firm Objectives, Organization, and Behavior / Entrepreneurship;
M13: Business Administration and Business Economics; Marketing; Accounting; Personnel Economics / Business Administration / New Firms; Startups
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