Evaluating the effectiveness of government incentives for private sector R&D expenditures in Turkey

Productivity growth is one of the most important factors that trigger sustainable growth and development. Productivity, which is one of the two main inputs of per capita economic production, can also be defined as an indicator of how effectively capital is used (Akçiğit, 2023). One of the most important methods of increasing productivity capacity is to produce new technologies, in other words, to innovate. When it comes to innovation, Research and Development (R&D) expenditures gain a special importance. In this framework, this thesis first evaluates the R&D expenditures made by the private sector in Turkey and OECD and the incentives given to private sector R&D expenditures by the public authority. Within the scope of the evaluations, the technology intensity of the sectors that are directly incentivized in the manufacturing industry, the size of the incentivized enterprises, the effects of the incentives on the level of competition in the sector and their reflections on the technology breakdown in foreign trade have been analyzed. As a result of the analysis, it is concluded that direct incentives are mostly concentrated in medium-high technology sectors, R&D expenditures are used more efficiently by medium-sized enterprises, while large enterprises benefit the most from incentives, and incentives are not designed in a way to reduce market concentration in sectors with the highest number of direct incentives.