Abstract:
Integrated reporting practices have become more prominent as the information demands of shareholders shift from strictly financial information to a combination of both financial and nonfinancial information. An integrated report combines these two aspects. It integrates financial and non-financial information and encourages a long-term vision. Integrated thinking is the active consideration of both financial and non-financial aspects of a firm and is what theoretically leads to a highly integrated annual report. It is expected that this integration of information in conjunction with a long-term vision lead to a lower information asymmetry as measured by the bid-ask spread. Using a global sample of over 6.000 firms, three main results are found: 1) Contrary to the expectations integrated thinking leads to a higher information asymmetry. 2) It is found that the relation between integrated thinking and information asymmetry is moderated by both financial and non-financial performance. 3) Firms located in a shareholder-oriented country have increased information asymmetry following integrated thinking, while firms located in stakeholder-oriented have the opposite effect. This thesis ends with a discussion of the found results and present recommendations for future research
