Abstract

Technology is one of the main factors of development at the moment when globalization is increasing very fast. The countries that are in competitive for the development and growth have to develop technology by making innovation. The automotive sector is generally one of the leading sectors in which these innovations are concentrated on R & D investments. The most powerful sector in R & D investment in Turkey is also the automotive sector. Therefore, enterprises engaged in R & D expenditures in the automotive sector in Turkey has been involved in this study. The aim of this study is to examine the relationship between R & D expenditures, profitability and net sales of the companies operating in the automotive sector. The data used in the study were obtained from the Public Disclosure Platform (KAP) database. The Income Statement and balance sheets of 3 companies engaged in R & D expenditures in the automotive sector in Turkey for 2008-2014 (quarter term) were utilized in this research. Unit root, co-integration and causality tests were conducted in order to examine the relationship between R & D expenditures of companies and variables that one analysis net sales, operating profit, profit before tax and net profit. Also firstly the unit root test was performed and the stability of the data was examined. As a result of this study, it was found that this variables were consistently and there was a long-term relationship between them. This relationship between R & D expenditures and profitability one way was unidirectional whereas two-way causality was found between net sales and R & D expenditures.