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Seoul Journal of Economics
[ Article ]
Seoul Journal of Economics - Vol. 36, No. 1, pp.113-136
ISSN: 1225-0279 (Print)
Print publication date 28 Feb 2023
Received 26 Oct 2022 Revised 09 Jan 2023 Accepted 11 Jan 2023
DOI: https://doi.org/10.22904/sje.2023.36.1.004

Trademarks, Own Brand Manufacturing, and Firm Growth at Different Stages of Development in Korea

Raeyoon Kang ; Keun Lee
Raeyoon Kang, Researcher, Institute of Economic Research, Seoul National University, Seoul, Korea raeyoonk@gmail.com
Keun Lee, Corresponding author, Distinguished Professor, Economics, Seoul National University, Seoul, Fellow, CIFAR (IEP Program), Toronto, Canada, Korea kenneth@snu.ac.kr

JEL Classification: O3; O4; O1

Abstract

This study attempts to verify the linkages between trademark registration and firm growth based on the different stages of development and two groups of sectors by using Korean firm data. Two different paths of firm growth in Korea are identified. In the trademark-dominant group, trademarks serve as a useful device for firm growth at the early stage of development, with technology at a low level, and then firms execute technological innovations to file more patents. In the patent-dominant group, utility models serve as a useful device for firm growth at the early stage of development, in which technology advancement is a prominent feature. Then, the sales growth of firms becomes positively associated with both patents and trademarks, the latter representing the effects of their brand power or the full transition to own brand manufacturing. Combined with the findings from the literature, this study finds that various types of intellectual property rights (IPRs) manifest differently for firms, from innovation to business growth, at different stages of economic development. A key lesson for catching-up economies is for conventional patents to not only consider the IPR type at the early stage of development in certain sectors but also take into account other IPRs, such as trademarks and utility models, to recognize and stimulate imitation and/or innovation. Innovation policy should be tailored not only toward the different stages of development and capabilities but also toward sectoral heterogeneity.

Keywords:

Trademark, Own brand manufacturing, Original equipment manufacturing, Innovation, Korea, Patent

Acknowledgments

An earlier version of this research was presented at the 2022 Seoul Journal of Economics Symposium. The authors thank the discussants and other participants for their useful comments. The authors also acknowledge support by the Laboratory Program for Korean Studies through the Ministry of Education of the Republic of Korea and the Korean Studies Promotion Service of the Academy of Korean Studies (AKS-2018LAB-1250001).

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