Abstract
At the macro level, the indicator of a high-quality economy is a high-quality production system. Meanwhile, a qualified production system can be achieved through qualified technological knowledge and applications that emerge as a result of Research and Development (R&D) activities. In today's technological world, R&D expenditures, which are widely used in the assessment of R&D, are now essential for the continuity and competitiveness of business enterprises. A production system based on R&D not only increases productivity and quality but also provides significant advantages in terms of cost. The purpose of this study is to investigate the effects of R&D expenditures on the sales and profitability of business enterprises. In line with this purpose, the relationship between R&D expenditures, sales and profitability of 20 manufacturing companies that are included in the BIST-100 index is investigated using the annual data for the period 2009-2021. In this analysis, the static panel data analysis with fixed effects proposed by Hansen (1999) is used. In conclusion, it is determined that investments made in the field of R&D two periods ago led to a regime shift in sales and profitability. Moreover, it is concluded that R&D investments should be kept at a certain level in order to increase sales and profitability.
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