The effect of R&D expenditures on profitability: A research on BIST Industrial Index industry

Technology and innovation have become an integral part of life. There are many innovations and changes every day. Businesses with the most basic purpose of profit must keep up with this technology era in order to survive. With their R & D expenditures, businesses are trying to maintain their position in the global competition and even move forward. In this study, the effects of R & D expenditures on the profitability of enterprises were investigated. The effects of R & D expenditures on profitability were analyzed by using 4 different models and panel data analysis methods by using annual data of 62 companies in BIST Industrial Index for 2012-2018 period. As a result of the analysis; It is determined that R & D expenditures decrease the operating profit of the enterprises in the current period and increase them in the second year and after. As the R & D intensity increased, the operating profit of the enterprises increased. In addition, it was determined that the increase in sales revenues had a positive impact on the profits of enterprises. Key Words: R & D Expenditures, Profitability, BIST Industrial Index, Panel Data