The Impact of Technological Capabilities on Venture Capital Inflows: Evidence from Patent Applications and R&D Expenditure in Korean Industries

This study examines the impact of technological capabilities across industries on venture capital (VC) inflows. Technological capabilities were proxied by industry-level patent applications and R&D expenditures. VC inflows were derived from annual investment statistics published by the Ministry of SMEs and Startups and the Korea Venture Capital Association. Multiple regression analysis shows that industries with more patent applications are more likely to attract venture investments. Moreover, the relationships among patents, R&D, and venture inflows vary significantly across industries. In the biomedical industry, VC inflows show strong positive correlations with patent applications (r = 0.762, <i data-eusoft-scrollable-element="1">p</i> < 0.001) and R&D investment (r = 0.900, <i data-eusoft-scrollable-element="1">p</i> < 0.001). In contrast, in the information and communication technology manufacturing sector, the association between patent applications and VC inflows is not statistically significant (R<sup data-eusoft-scrollable-element="1">2</sup> = 0.002, <i data-eusoft-scrollable-element="1">p</i> > 0.05), implying that the conversion efficiency of technological outputs into investment differs according to the industrial structure. This study provides evidence of how technological development translates into commercialization and private investment. The findings contribute to a nuanced understanding of success factors in technology-based startups by industry and may serve as a foundation for the formulation of effective policy measures and investment strategies to promote private capital inflows.