Intellectual capital, liquidity, and bankruptcy likelihood

AbstractThis study investigates the impacts of intellectual capital on the liquidity of assets and stocks and the bankruptcy likelihood. Multivariate regression models with combined data used to test the hypotheses. Using a sample of 147 companies listed on the Tehran Stock Exchange during 2010–2017, the results indicate that intellectual capital has a positive effect on the liquidity of assets and the liquidity of stocks, and that it has an inverse relation with the bankruptcy likelihood. Moreover, we found that the liquidity of assets has a negative effect on the bankruptcy likelihood. However, the liquidity of stocks has no significant effect on the bankruptcy likelihood. In general, the findings of this study provide evidence of the effective role of intellectual capital in improving the liquidity of assets and the impacts of both the intellectual capital and the liquidity on reducing the bankruptcy likelihood. This study provides evidence of the prominent role of intellectual capital in the intelligent management of corporate liquidity and reducing the likelihood of bankruptcy.