The effect of research & development activities on the firms profitability: An application in BIST 100 index

Rapid developments in science and technology have deeply affected firms. In particular, the fact that science and technology become a means of superior advantage among companies increases the investments made by companies in science and technology. The impact of these investments on the firm is a matter of curiosity for both companies and the academic community. In this study, the relationship between the R&D expenditures and the profitability of firms in Bist 100 between 1999-2017 was analyzed by Pedroni cointegration test. Coefficient of cointegration relation was also analyzed by DOLS and FMOLS cointegration tests. As a result of the analysis, it has been found that companies' R&D expenditures and profit (EBIDTA) figures are long term cointegrated. That is to say they move together and positive in the long term