The effects of government subsidies according to the financial status of start-ups: Focusing on Moral Hazard of Smart Technology Entrepreneurs in the edible insect industry

Abstract

ABSTRACT The purpose of this study is to investigate the efficiency of smart farm facilities of insect business entities. A questionnaire was conducted to investigate the actual conditions of smart farm edible insect business entities. A survey of 500 edible insect farms, all of which raised insects within 7 years of establishment, was conducted, and all of them raised insects in smart farm facilities. First, after dividing the smart farm into three levels, efficiency was measured. In particular, efficiency was analysed by distinguishing cases of possessing capital and those of receiving support from the government. The results confirmed that receiving government subsidies is more efficient than using own capital. The most significant finding is that if a business entity has a large amount of its own capital and receives government subsidies, efficiency decreases. In other words, when allocating government subsidies, the efficiency of those subsidies can be improved by first identifying the status of existing capital.