Relation between R&D expenditures and financial failure risk

As a result of increasing commercial competition in line with globalization, the identification of the risk factors and also efficiency improvement come into prominence as a necessity for continuity of companies. Periodically emerging happenings in worldwide, such as geopolitical developments, inflation and epidemic, may create market fluctuations and may cause unexpected effects on the financial standing of companies. In this respect, the determination of the financial risks of the companies and also identification of risk sources come into prominence over time. On the other hand, awareness of risk is not sufficient for continuity of companies; with the effect of technological developments and increasing competition conditions, improvement of efficiency emerges as one of the most important goals for manufacturers over time. At this point, R&D expenditures come to light as one of the most important concepts in terms of product improvement and cost advantage for manufacturers. In this study, it is investigated whether there is a causal relationship between firms' R&D expenditures and financial failure risks.