Investigation of the relationship between bankruptcy risk, intellectual capital and its components for the companies listed in Tehran Stock Exchange

Purpose– The main purpose of this research is to empirically investigate the relationship between bankruptcy risk، intellectual capital (IC) and its components for listed companies in the Tehran Stock Exchange (TSE). Design/methodology/approach– In order to achieve the purpose of the research، four hypotheses were proposed. Multiple linear regression analysis was examined to test the research hypotheses. The empirical data were drawn from a group consisting of 80 Iranian companies listed in the TSE، over the eight-years period of 2004 to 2011. Bankruptcy risk was measured by using Altman’s model and the IC and its components were measured using Pulic’s model. Findings– The results of the hypotheses testing demonstrate that IC exhibits a negative significant relationship with the bankruptcy risk. Furthermore، there is a negative significant relationship between the bankruptcy risk and components of the IC (employed capital efficiency، human capital efficiency and structural capital efficiency). Conclusion and originality/value– Since IC and its components are negatively related to the bankruptcy risk، it is concluded that IC can improve the financial performance and prevents failure. Therefore IC can decrease the economic، social and political consequences of the bankruptcy.