The study examines one of the conventional, but still controversial issues in modern finance, which identifies financial determinants of corporate R&D intensity for firms belonging to Korean chaebols. Further empirical examinations are also conducted to identify inter-industry financial differences among the sample industries consisting of the chaebol firms. Various empirical estimation procedures are applied to derive more robust results of each hypothesis test. On an absolute basis, static panel data, Tobit regression and stepwise regression models are employed to obtain significant financial factors of the R&D expenditures, while logit, probit and complementary log-log regression models are used to detect financial differences between the chaebol firms and their counterparts that are not classified into the chaebols on a relative basis. On the results, the level of the R&D intensity in the prior fiscal year, market-value based leverage ratio and firm size empirically showed their significance to account for corporate R&D intensity in the first hypothesis test, whereas a majority of the explanatory variables among total eleven variables had important power on a relative basis. Assuming that a current circumstance in the domestic capital market may necessitate gradual changes of Korean chaebols in the aspect of their socio-economic function, the results of the study is expected to contribute to identifying financial antecedents that can be beneficial to attain optimal level of corporate R&D expenditures for the chaebol firms on a virtuous cycle.

Keywords: Global Financial Turmoil, Korean Chaebol, Limited Dependent Variable, Research & Development,

JEL Classifications: G11, G30, G32