What drives researcher preferences for chemical compounds? Evidence from conjoint analysis.

We investigated the attributes and attribute levels that affect researcher preferences for chemical compounds. We conducted a conjoint analysis on survey data of Korean researchers using chemical compounds from the Korean Chemical Bank (KCB). The analysis estimated the part-worth utility for each attribute's level, calculated relative importance of attributes, and classified user segmentation with different patterns. The results show that the structure database offers the highest part-worth utility to researchers, followed by high new functionality, price, screening service, and drug action data provided only by the KCB. Notably, researchers view the offer of a structured database and high new functionality as more important than other attributes in decision-making about research and development of chemical compounds. Furthermore, the results of segmentation analysis demonstrated that researchers have distinct usage patterns of chemical compounds: researchers consider structure database and high new functionality in cluster 1; and high new functionality and price in cluster 2, to be the most appealing. We discussed some policy and strategic implications based on the findings of this study and proposed some limitations.

Do public subsidies trigger firms' overinvestment? Evidence from the Korean renewable energy technology industry.

We empirically investigate whether government subsidies result in firms' overinvestment using unbalanced panel data from 61 renewable energy technology firms in Korea between 1991 and 2018. Considering the diagnostic test results, we build a panel vector autoregression model and test how overinvestment is influenced by research and development and non-research and development government subsidies and the interactions between subsidies, leverage, and free cash flow. We find that these subsidies do not significantly induce overinvestment by firms. In addition, non-research and development subsidies affect overinvestment positively through leverage and affect it negatively through free cash flow interactions. We also find that leverage and free cash flow do not affect overinvestment in Korea's renewable energy technology sector directly; however, firms with positive free cash flow tend to overinvest. One factor that drives renewable energy technology firms in Korea to overinvest is external growth opportunities. We suggest various policy implications based on this study's results.