U-shaped relationship between market liberalisation and technology exploration: evidence from South Korean firms

Abstract

A variety of countries have instituted market liberalisation to develop their economies in the footsteps of more developed countries and changes in market system significantly influence a firm's behaviour and performance. This paper investigates the impact of market liberalisation on a firm's strategy of technology exploration in South Korea. We find that there is a U-shaped relationship between market liberalisation and technology exploration. In addition, we find that financial slack and industry concentration negatively moderate the curvilinear relationship between market liberalisation and technology exploration, while business group positively moderates this relationship.