Exploring the firm and country determinants of the voluntary adoption of integrated reporting

Information used to manage the business and support the decision‐making of stakeholders is being subject to an evolution. In this context, traditional financial reporting is considered not sufficient anymore. This has translated into a sharp increase in the number of firms that have begun to adopt e...

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Bibliographic Details
Published in:Business strategy and the environment 2019-11, Vol.28 (7), p.1323-1340
Main Authors: Girella, Laura, Rossi, Paola, Zambon, Stefano
Format: Article
Language:English
Subjects:
Collectivism
Companies
Corruption
country‐specific determinants
Decision making
Economics
Financial reporting
firm‐specific determinants
Information management
integrated reporting
Legal system
Leverage
Profitability
Risk perception
voluntary adoption
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Summary:Information used to manage the business and support the decision‐making of stakeholders is being subject to an evolution. In this context, traditional financial reporting is considered not sufficient anymore. This has translated into a sharp increase in the number of firms that have begun to adopt emerging reporting practices. This study aims to examine the influence that both firm‐ and country‐specific characteristics have on the voluntary uptaking of integrated reporting internationally. In order to do so, it analyses a sample of 71 international listed companies that have adopted this reporting form in 2016. The results show that firms are more likely to implement integrated reporting if they are located in countries with a higher level of corruption perception and a better risk rating and that are considered as relatively more collectivist and feminist and with a long‐term orientation. Legal system has resulted to be not significant. As for firms' characteristics, large size, profitability, market‐to‐book ratio, and the size of the board are found to be significant variables. Moreover, the results indicate that the adoption of integrated reporting is not influenced by a higher level of leverage, firm efficiency and board diversity and independence.
ISSN:0964-4733
1099-0836
DOI:10.1002/bse.2318