EFFECT OF CORPORATE GOVERNANCE PRACTICES ON R&D AND INNOVATION COSTS: A CASE STUDY ON BORSA İSTANBUL

Abstract

This study aimed to reveal the impact of corporate governance practices (CGP) on research and development (R&D) expenses and innovation costs. The businesses registered in Borsa Istanbul (BIST), with complete data regarding R&D and innovation costs for 2009–2017, were analyzed. The panel regression analysis performed through the STATA 15.0 program revealed that the board size, number of independent board members, gender diversity in the board of directors, chairman’s tenure, board meeting frequency, and business scale had a statistically significant and positive effect on the realized R&D expenses. Furthermore, it was determined that the number of foreign members of the board of directors, board ownership, and the organizational age had a statistically significant and negative effect on the nominal R&D expenses. However, it was also discovered that the role duality and business scale had a statistically significant and positive impact. In contrast, the foreign member ratio on the board of directors and organizational age had a statistically significant and negative effect on innovation costs.