Factors Affecting Financial Flexibility of Firms Listed in Tehran Stock Exchange

Abstract

Financial flexibility is a degree of firm’s capacity that can mobilize financial resources towards reactive activities to maximize the value of firm. The aim of this study is to investigate factors affecting financial flexibility based on panel data in firms listed in Tehran Stock Exchange. For this reason firms listed on Tehran Stock Exchange during the years 2009 to 2014 with systematic deletion method and by considering inherent limitations in this field have been screened, andthe number of remaining firms to test research hypotheses were 106 firms in terms of 630 observation. Estimation results showed that, financial leverage and the current ratio variablesin listed firms of Tehran Stock Exchange don’t have significant impact on financial flexibility and firm size variable has a negative and significant impact on financial flexibility and profitability variable has a positive and significant impact on financial flexibility.