Investigation of relationship the R&D expenditure with stock returs and risk: The example of Turkey

Recent years R&D expenditures and their effects on stock returns and risk have become one of the remarkable subjects in financial world. In this study sixty two IMKB manufacturing firms that make R&D expenditures regularly between the years of 2004 ? 2008 have been investigated. To determine the effects of R&D expenditures on stock returns and risk two models have been established. In the established multiple regression models, as independent variables R&D expenditures and also firm size and book to market ratio have been used. On the contrary to conducted studies in developed countries such as USA, Japan, Sweden and United Kingdom, this study theorizes that there is no relation between R&D expenditures with stock returns and risk. When comparing with developed countries, in Turkey the reason for this situation is inadequate R&D expenditures to affect stock returns and risk.Key Words: R&D Expenditures, Stock Returns, Risk