<p>South Korea’s Cooperation Fund is a government-led initiative that encourages large firms to voluntarily support the development of small and medium-sized enterprises (SMEs) with the aim of fostering a balanced industrial ecosystem. This study has two objectives (i) to examine how tax credit incentives influence the contribution behavior of large firms, and (ii) to assess how the fund’s operations affect the performance of beneficiary SMEs. Using firm-level panel data, the results show that an increase in the tax credit significantly raised both the likelihood and the amount of contributions made by large firms. In addition, SMEs receiving support from the fund exhibited improvements in sales growth and research and development investment, while showing no clear enhancement in profitability relative to comparable non-beneficiary firms, indicating moderate performance gains. Overall, the findings provide policy-relevant evidence on the effectiveness of fiscal incentives in promoting voluntary corporate participation and on the role of fund support in advancing inclusive industrial development.</p>