The Impact of R&D Investments and Sustainability Score on Firm Growth: Evidence from BIST 100 with the CCEMG Estimator
DOI:
https://doi.org/10.63556/tisej.2025.1928Keywords:
R&D expenditures, BIST Financial Index, Firm Size, CCE EstimatorAbstract
In financial markets, R&D investments and sustainability activities of companies are becoming increasingly important in terms of investor choices. The purpose of this study is to analyze whether companies' R&D expenditures and corporate sustainability performance influence company growth rates. The data set for the study consists of annual financial data from 61 companies listed on the BIST 100 index, for which continuous data was available, covering the years 2000-2024. In this study, three different models were established, including firm growth rate, R&D expenditures, ESG score, and the BIST sustainability index as dummy variables. Accordingly, the models established to examine the relationship between the series were analyzed using the CCEMG estimator. This estimator was chosen because it can be used in series with cross-sectional dependence and non-stationarity, and it eliminates the need to test for cointegration between variables. The analysis found no relationship between companies' R&D expenditures, corporate sustainability scores, working capital, and D/E ratio and their growth rates. On the other hand, it was concluded that companies' earning strength and market capitalization have a positive effect on their growth rates. It can be said that the relationships identified in all models did not continue in the long term and that macroeconomic developments and sector-specific shocks affecting company growth rates in the long term had an impact on the process.
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