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The Effect of R&D Expenditures on Financial Performance: A Research on Defense Industry Companies

Author

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  • Yusuf Tepeli

    (Muğla Sıtkı Koçman University, Faculty of Economics and Administrative Sciences)

  • Çağatay Mirgen

    (National Defense University)

Abstract

Developing new products, adding new qualities to existing products or raising quality standards through R&D activities gives companies a competitive advantage. In addition, R&D studies are also effective in terms of cost advantage, which is seen as the main way to increase profitability. In public companies, increasing financial performance also has a positive impact on the company market value. In this respect, this study investigates the impact of R&D expenditures on financial performance in the defense sector, which is an R&D intensive sector. According to the findings obtained from 8 different models established separately, it was found that there was a significant positive relationship between R&D expenditures and dividends per share and closing share price, while R&D expenditures had no effect on other variables.

Suggested Citation

  • Yusuf Tepeli & Çağatay Mirgen, 2024. "The Effect of R&D Expenditures on Financial Performance: A Research on Defense Industry Companies," Journal of Finance Letters (Maliye ve Finans Yazıları), Maliye ve Finans Yazıları Yayıncılık Ltd. Şti., vol. 39(122), pages 59-78, October.
    • Handle: RePEc:acc:malfin:v:39:y:2024:i:122:p:59-78
    DOI: https://doi.org/10.33203/mfy.1434657
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    More about this item

    Keywords

    R&D Expenditures; Financial Performance; Defense Industry;
    All these keywords.

    JEL classification:

    • C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models
    • O16 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Financial Markets; Saving and Capital Investment; Corporate Finance and Governance
    • O43 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Institutions and Growth

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