The effect of R&D intensity and internationalization on financial performance: An application on Borsa İstanbul automotive industry

In addition to being the leading actor in the benefits such as exports, employment, and tax gains to the national economies, the automotive sector is also the trigger for the technological development of the related sectors. This study aims to examine the relationship between R&D intensity, internationalization, and financial performances of 20 automotive industry companies whose shares traded in Borsa Istanbul between 2009-2019 with panel data analysis. The study also explores the moderator role of internationalization in the relationship between R&D intensity and financial performance. The investigation is crucial because it is one of the first studies to examine the relationships between R&D intensity, internationalization, and financial performance at the sector level in a developing country like Turkey. According to the findings obtained from the analysis, there is a negative relationship between R&D intensity and financial performance measures in the short term. On the other hand, internationalization does not statistically affect the current year's financial performance of companies. We also revealed that internationalization weakens the possible positive relationship between R&D intensity and financial performance. Keywords: R&D Expenditure, Export Intensity, Return on assets, Return on equity, Automotive Sector,