R D Investments and Growth: An Empirical Study on Manufacturing Industry

This study aims to find out possible effects of R D investments on industrial growth. The sample of the study is the manufacturing industry consisting of BIST-listed manufacturing firms in the period of 1992.Q1-2013.Q3. In the study, to test the stationary of series and the co-integration relationship between them, unit root test of Carrioni-i-Silvestre et al. (2009) and co-integration test of Maki (2012) are used, respectively. Long term co-integration coefficients are estimated by means of Stock and Watson (1993)’s Dynamic Ordinary Least Squares (DOLS) method. Structural break dates estimated point out dramatic turning points in Turkish economy. Maki (2012) test results show co-integration relationship between the series in the long run. Long run parameters estimated by using DOLS method indicate that there are no statistically significant relationships between growth and R D investments, and between growth and profitability. However, the relationships between growth and intangible, and growth and operating cash flows are statistically significant and positive.