Study of R&D expenditures on the effects of performance of the companies by the dynamic panel data analysis method

Research and Development (R&D) operating expenses; developing new products and processes for the continuity of companies' cash flows; consists of expense items incurred in order to ensure their continuity. With the R&D expenses incurred in the current period and the new products or processes to be developed, it is aimed that the companies will gain more sales revenue in the following periods. It may be possible to achieve economic growth through these products and processes developed through R&D and innovation activities. Undoubtedly, one of the biggest reasons underlying the economic growth of companies and countries indirectly is R&D activities. The aim of our study is to examine the effects of the ratio of the expenditures made within the framework of R&D activities to the company's sales on the performance of the companies by using the dynamic panel data analysis method. In order to explain how the expenses incurred for R&D activities in order to increase the assets of the companies affect the performance of the companies, cross-section or time series analyzes were used in most of the studies conducted in developed and developing countries. However, since it was seen that the delayed effects of R&D activities on firm performance were not adequately examined, Dynamic Panel Data Analysis method was used in our study. The main purpose of this study, which examines the effects of the ratio of R&D expenditures made in companies traded in the manufacturing industry on Borsa Istanbul (BIST) to the company's sales, on the profits, sales, exports and market value of the companies, is to examine the companies operating in a developing country like Türkiye. It is to reveal the effects of the sales ratio of R&D expenditures on company performances with the Dynamic Panel Data Analysis method. As a result of the study, it is seen that R&D activities do not affect the market value of companies at the desired level in our country.