Financial Statement-Based Determinants of R&D Investments

Abstract

This study aims to shed light on driving factors of research and development (R&D) investments by considering financial statement-based characteristics, audit quality, and Schumpeterian variables. This study distinguishes between capitalized R&D investments and expensed R&D investments by taking different accounting treatments into account. Based on a sample of listed manufacturing firms on Borsa Istanbul over 2013–2018, this study concludes that (i) competition (size) decreases (increases) R&D investments, (ii) big4 auditors pay more attention to the proper accounting treatment of R&D investments, (iii) internal financing does not affect R&D investments, and (iv) liquidity (leverage and marketing expenditures) plays a positive (negative) role in only capitalized R&D investments.

Citation

Ertuğrul, M. (2021), "Financial Statement-Based Determinants of R&D Investments", Dinçer, H. and Yüksel, S. (Ed.) Strategic Outlook in Business and Finance Innovation: Multidimensional Policies for Emerging Economies, Emerald Publishing Limited, Leeds, pp. 135-147. https://doi.org/10.1108/978-1-80043-444-820211013