Majid Zanjirdar ¹, Ava Kabiribalajadeh ¹

Affiliations
1 Department of Management, Arak Branch, Islamic Azad University, Arak, IR

Abstract

The subject of government downsizing and privatization is one of the most important issues of today Iran's economy. The agency and public choice theories show that private ownership is superior to governmental ownership and privatization will lead to better performance. This research examines the relation between ownership structure as a measuring criterion of corporate governance and performance of intellectual capital as one of the variables to create competitive advantage and efficiency. Also, the research will answer to the question that to what extent the reformation of the type of ownership on companies and privatization affects the development strategies of organizations in order to achieve greater effectiveness in the performance of intellectual capital. In this regard, information of 80 companies listed in Tehran stock exchange in the period of 2003-2009 was studied. To measure intellectual capital of companies, the Pulik's model has been used. The results of hypothesis tests, using simple and multiple linear regression, indicate that the presence of institutional investors decrease the performance of intellectual capital in the companies; also in private ownership, corporate investors increase the performance of companies' intellectual capital and managerial investors decrease the performance of companies' intellectual capital.

Keywords

Corporate Governance, Ownership Structure, Privatization, Intellectual Capital Performance

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Mehrdad Ghanbari ¹, Farhad Shahveisi ², Farshid Kheirollahi ², Ava Kabiribalajadeh ³

Affiliations
1 Department of Accounting, College of Humanities, Kermanshah Branch, Islamic Azad University, Kermanshah, IR
2 Department of Accounting, Faculty of Social Science, Razi University, Kermanshah, IR
3 Young Researchers and Elite Club, Gorgan Branch, Islamic Azad University, Gorgan, IR

Abstract

Background/Objectives: Investment sources are allocated to economic activities through financial markets. One important topic is studying and evaluation of credit risks that is breach probability for reimbursement of granted facilities by customers. Methods/Statistical Analysis: This research evaluated the effects of financial flexibility independent variable on the probability of default dependent variable. This was investigated by gathering data from 101 companies receiving bank facilities from 2009 to 2013. To measure credit risk of companies, KMV Model has been used. The study hypotheses tested using combinational data, and for data analyzing and evaluating multi-variable regression model and study’s hypotheses test, we used E-views software. Findings: This research identifies some of the effective factors related to financial flexibility, as one of the modern financial patterns and strategies, affecting probability of default. The results show that there is a reverse and significant relation between financial flexibility and default probability. Also, there is a reverse and significant linear relation between flexibility and default probability of companies with high and low financial leverages, too with small and large sizes. Thus, relation rate varies in different levels of firm sizes and financial leverages, which indicates the effect of company size and financial leverage variables on relations between independent and dependent variables. Application/Improvements: Regarding to the results, it is recommended that banks andfinancial institutions and companies that sell credits notice financial flexibility, financial leverage, company sizes, and the effects of these variables on debt default when granting facilities.

Keywords

Credit Risk, Financial Flexibility, KMV Model, Leverage, Probability of Default, Size

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