Investigating the Behavioral Impact of Intellectual Capital on Financial Flexibility

This paper investigated the behavioral impact of intellectual capital in explanation of financial flexibility of companies listed in Tehran Stock Exchange over a 5 years period 2008 to 2012. In this study، value added intellectual capital coefficient model is used to measure intellectual capital and free cash flow to firm is used for measuring the financial flexibility. According to the results، intellectual capital has negative and significant effect on the firm''s financial flexibility. It means that intellectual capital has negative informative content and reversal behavior in explanation of financial flexibility. Other findings indicate that there is a meaningful difference between financial flexibility of firms which have high level of intellectual capital compare to those have low level of intellectual capital. Also، the relationship between intellectual capital and financial flexibility in firms with high level of intellectual capital is stronger than firms with low level of intellectual capital.