The relationship between intellectual capital and earnings predictability in the companies listed in Tehran stock exchange

Abstract

In this paper the researchers examined the relationship between intellectual capital and the earnings predictability of companies listed in Tehran Stock Exchange. The study was carried out in a period of time, between the years 2007 to 2011 which involved 101 companies listed in the Stock Exchange of Tehran. Research hypotheses, consisted of two main hypotheses, the first of which also included three sub- hypotheses. Research variables included components of intellectual capital as an independent variable and earnings predictability as the dependent variable. Firm size is also considered as a moderator variable. In order to test the research hypotheses, the researchers collected the necessary information from various sources, the Pulic model was used for estimating the value of intellectual capital and the Francis model was used to assess the earnings predictability. To summarize the data, the variables were fed into the Excel and then were processed by means of Eviews7 software for testing the hypotheses. The method used in this study was panel data with fixed effects. The results of testing the research hypotheses indicated that there is a significant relationship between intellectual capital and earnings predictability companies listed in the Stock Exchange of Tehran. It also shows that firm size as a moderator variable, affects the relationship between intellectual capital and earnings predictability in this corporation.