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

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