Integrated reporting and capital markets in an international setting: The role of financial analysts

This study investigates the interplay between integrated reporting (IR) and capital markets. In particular, building on voluntary disclosure and information processing theories, we hypothesize and empirically find that IR adoption improves analysts' ability to make accurate earnings forecasts....

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Bibliographic Details
Published in:Business strategy and the environment 2019-11, Vol.28 (7), p.1465-1480
Main Authors: Flores, Eduardo, Fasan, Marco, Mendes‐da‐Silva, Wesley, Sampaio, Joelson Oliveira
Format: Article
Language:English
Subjects:
Analysts
Capital markets
Corporate governance
Data processing
Disclosure
Earnings
financial analysts
Financial market
Information processing
integrated report
international setting
Investment
Policy making
Securities markets
stakeholder engagement
Stockholders
sustainable development
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Summary:This study investigates the interplay between integrated reporting (IR) and capital markets. In particular, building on voluntary disclosure and information processing theories, we hypothesize and empirically find that IR adoption improves analysts' ability to make accurate earnings forecasts. Whereas previous studies focus on the South African context, we rely on an international sample that also allows us to study the moderating effect of the corporate governance regime (shareholder or stakeholder oriented). The results suggest that IR improves analysts' ability to make accurate predictions to a larger extent in North America than in Europe, and we derive interesting insights on the much‐debated nature of IR. This study offers valuable insights to policy makers interested in improving disclosure practices in the financial market.
ISSN:0964-4733
1099-0836
DOI:10.1002/bse.2378