Role of Intellectual Capital on Firms Financial Flexibility and Performance: Based on Time Delay Variable

Subject Areas :

Farzin Rezaei ¹ (استادیار دانشگاه آزاد اسلامی واحد قزوین)
Khadijeh Isazadeh ² (دانشجوی کارشناسی ارشد دانشگاه آزاد اسلامی واحد قزوین)

Received: 2015-11-03 Accepted : 2015-11-03 Published : 2010-12-22

Keywords: Intellectual Capital, Financial Performance, Financial Flexibility, Cash Flow, Time delay, Auto regression,

Abstract :

The purpose of this study is to investigate the relation between Intellectual Capital, Financial Flexibility and Financial Performance. Using data drawn from 73 Iranian companies listed in Tehran Stock during 2003-2008, the authors construct regression models to examine the relationship between Intellectual Capital, Financial Flexibility and Financial Performance. The results support the hypothesis that firms’ intellectual capital has a positive, significant and strong impact on financial flexibility (Free cash flow and Operational cash flow). In addition, evidence is presented that intellectual capital has a positive impact on financial performance (return on assets and cumulative abnormal assets) but intellectual capital does not have a positive impact on sustained capital. Also evidence is presented that the relationship between intellectual capital and financial flexibility is stronger than the relationship between intellectual capital and financial performance.