The relationship between the level of integratedness of corporate reporting and financial performance. Exploring the moderating effect of investor protection

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2020-08-18
Language
en
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Abstract
Over the years, companies have increased the disclosure of integrated information. Previous studies suggest that integrated reporting has a positive effect on financial performance, but the evidence is mainly based on samples of South African firms. In this study, the direct relationship between the level of integratedness of corporate reporting and financial performance in both the short and long term is investigated using a worldwide scope. Furthermore, the moderating effect of investor protection on the previously specified relationship is investigated. Panel data regressions are conducted in order to analyze a balanced dataset of 3,332 companies from 52 countries for the period of 2014-2018. This study is one of the first to provide empirical evidence for a positive relationship between the level of integratedness of corporate reporting and financial performance, in both the short and long term. Furthermore, the evidence shows that investor protection negatively moderates this relationship in the short term. Additional tests also provide evidence for the negative moderating effect of investor protection on this relationship in the long term. These results are valuable for corporate managers who intend to increase corporate value and for investors who seek for new investment opportunities.
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Faculteit der Managementwetenschappen