Using Data Set from Science & Technology Policy Institute (STEPI), this paper investigate the relationship between firm size and technology innovation activity measured as R&D expenditure. Many studies have investigated the issue for the industries of U.S. and some European countries. But very little literatures have been produced for Korean industries. This study is the first step on the investigation of the R&D-firm size relationship for Korean industries, and among the countries in the different stages of economic development by comparing our results with the previous findings of U.S. industries. One of the interesting finding in this study is that the relationship between firm size and R&D activity is very sensitive to the sample space on which the regression analysis is carried out.

The general result from this study is that overall the famous Schumpeterian hypothesis (positive relationship between firm size and R&D activity) is not supported for Korean industry case. For Korean industries, except for some industries, a certain pattern in R&D-firm size relationship can be found; R&D intensity decreases with firm size until certain point and then increase after that. And there is an inflection point after that the increasing research intensity rate slows down.