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Financing R&D and shaping capital structure in Türkiye

Vijdan UĞURLUAY & Jale Oran

Borsa Istanbul Review2026https://doi.org/10.1016/j.bir.2026.100820article
ABDC B
Weight
0.50

Abstract

This study explores how financial constraints shape firms’ innovation activities and capital structure choices when financing research and development (R&D). The main objective is to determine whether internal finance helps firms sustain R&D investment when access to external funds becomes limited, especially during periods of high inflation and economic instability. Examining firm-level data from Borsa Istanbul (BIST) covering 2010–2024, this study analyzes the link between internal cash flow and R&D spending. To address potential endogeneity and unobserved firm heterogeneity, several econometric methods are applied, including fixed effects and generalized method of moments (GMM) estimators. The findings indicate that internal finance is a key factor supporting R&D expenditures. In addition, R&D investment is not found to be significantly associated with long-term leverage, likely because R&D projects are risky and lack collateral value. Overall, this study highlights that macroeconomic stability and improved financing conditions are necessary to strengthen innovation in emerging markets.

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https://doi.org/https://doi.org/10.1016/j.bir.2026.100820

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@article{vijdan2026,
  title        = {{Financing R&D and shaping capital structure in Türkiye}},
  author       = {Vijdan UĞURLUAY & Jale Oran},
  journal      = {Borsa Istanbul Review},
  year         = {2026},
  doi          = {https://doi.org/https://doi.org/10.1016/j.bir.2026.100820},
}

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Evidence weight

0.50

Balanced mode · F 0.40 / M 0.15 / V 0.05 / R 0.40

F · citation impact0.50 × 0.4 = 0.20
M · momentum0.50 × 0.15 = 0.07
V · venue signal0.50 × 0.05 = 0.03
R · text relevance †0.50 × 0.4 = 0.20

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