Determinants of Companies that Disclose High-Quality Integrated Reports

Petra F. A. Dilling and Sinan Caykoylu
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Petra F. A. Dilling: School of Management, New York Institute of Technology, Vancouver, BC V7Y 1K8, Canada
Sinan Caykoylu: School of Management, New York Institute of Technology, Vancouver, BC V7Y 1K8, Canada

Sustainability, 2019, vol. 11, issue 13, 1-31

Abstract: Integrated reporting is becoming increasingly popular. The focus of this study was to assess the overall integrated reporting quality of global companies and find determinants of high-level integrated reporting. Qualitative text analysis was performed on the 2017 integrated reports of 110 global organizations to determine in what way companies report on specific topics related to the six capitals: social and relationship, human, intellectual, manufacturing, natural, and financial. Using a novel assessment technique, scores were then assigned according to the details provided in the integrated reports on the various topics. This was done for each form of capital, and the total integrated score was subsequently calculated as the average between all the capital scores. Finally, a regression analysis was performed to determine the characteristics of high-quality integrated reporters. The results of univariate analysis and two-stage least squares instrumental variable (2SLS) regression indicate that companies of a larger size with a higher female board ratio and listing in the International Integrated Reporting Committee (IIRC) examples database are more likely to publish a higher quality integrated report. The results imply that these variables are the main disclosure drivers. However, a significant negative correlation was found between integrated report quality and the variables related to female executive ratio, external board member ratio, profitability, leverage, and previous report experience, as well as report length. No significant association was found between the location and industry group and report quality. The empirical evidence of this study shows that even though integrated reporting has become more common overall, the comparability and quality of the reports still remain low.

Keywords: integrated reporting; sustainability; content analysis; corporate social responsibility (CSR); long-term value creation; six capitals; legitimacy theory; stakeholder theory; voluntary disclosure theory; qualitative research; empirical research; regression; OLS; 2SLS; endogeneity; instrumental variables (search for similar items in EconPapers)
JEL-codes: O13 Q Q0 Q2 Q3 Q5 Q56 (search for similar items in EconPapers)
Date: 2019
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (12)

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