Effects of Intellectual Capital and Free Cash Flow on Cost Stickiness

The purpose of this study is to investigate the effect of intellectual capital and free cash flow on cost stickiness of listed firms in Tehran Stock Exchange. This study, reviewing the theory, represents a complex pattern of asymmetric behavior of costs using free cash flow and intellectual capital. The statistical sample consists of 111firms listed in Tehran Stock Exchange during the period from 2005 to 2015. This study uses intellectual capital and its’ components, as well as free cash flow as independent variables; stickiness of selling, general and administrative costs as dependent variables; and the intensity of staffs, intensity of assets, continual reduction of revenue, and growth of gross domestic production as control variables. Data is gathered using panel data method and analyzed using multivariate regression model and Eviews. The first hypothesis test results show that there is a significant anti-stickiness relation between free cash flow and selling, general and administrative costs. The second hypothesis test results show a significant anti-stickiness relation of free cash flow amounts and the intellectual capital to the stickiness of selling, general and administrative cost. Finally, the third hypothesis test findings show that the significant anti-stickiness relation is more in firms with high intellectual capital