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

Yusuf Tepeli and Çağatay Mirgen
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Yusuf Tepeli: Muğla Sıtkı Koçman University, Faculty of Economics and Administrative Sciences
Çağatay Mirgen: National Defense University

Journal of Finance Letters (Maliye ve Finans Yazıları), 2024, vol. 39, issue 122, 59-78

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.

Keywords: R&D Expenditures; Financial Performance; Defense Industry (search for similar items in EconPapers)
JEL-codes: C23 O16 O43 (search for similar items in EconPapers)
Date: 2024
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Persistent link: https://EconPapers.repec.org/RePEc:acc:malfin:v:39:y:2024:i:122:p:59-78

DOI: 10.33203/mfy.1434657

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