African Journal of
Business Management

  • Abbreviation: Afr. J. Bus. Manage.
  • Language: English
  • ISSN: 1993-8233
  • DOI: 10.5897/AJBM
  • Start Year: 2007
  • Published Articles: 3976

Full Length Research Paper

Does the market reward integrated report quality?

Simona Cosma
  • Simona Cosma
  • Department of Economics Sciences, Faculty of Economics, University of Salento, Italy.
  • Google Scholar
Maria Gaia Soana
  • Maria Gaia Soana
  • Department of Economics and Management, Faculty of Economics, University of Parma, Parma, Italy.
  • Google Scholar
Andrea Venturelli
  • Andrea Venturelli
  • Department of Economics Sciences, Faculty of Economics, University of Salento, Italy.
  • Google Scholar


  •  Received: 13 November 2017
  •  Accepted: 23 January 2018
  •  Published: 28 February 2018

Abstract

Although some studies show the benefits of adopting integrated reporting (IR), its real value has not yet been sufficiently investigated. As integrated reporting development implies high costs for the company, the management has to evaluate the economic advantage of such investment. This study aims to establish whether a high quality IR influences firm market value. Specifically, we investigate whether shareholders take into account the good quality disclosure provided by IR in their investment assessments and reward the outstanding firms. We proxy high quality disclosure by the awards assigned to IRs published by a sample of South African listed companies for the period 2013 to 2016. Using event study methodology, we found out that the stock market reacts positively to award announcements, the value attributed by shareholders to the quality of IR is persistent, grows over time and is particularly high in non-financial companies. This evidence should encourage managers to invest in improving IR disclosure quality.

Key words: Integrated reporting, corporate social responsibility, market value, disclosure quality, event study, shareholder.