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Integrated reporting and cost of capital: The moderating role of cultural dimensions

Integrated reporting and cost of capital: The moderating role of cultural dimensions Since its introduction, integrated reporting (IR) has triggered a rich debate covering several aspects, from the structure and the features of a document to the effects of its publication. Very recently, scholars have examined the negative relationship between IR and the cost of capital for firms, completely missing the opportunity to understand whether this fact is contingent on the cultural context that adopting companies operate in. We fill this gap by resorting to a panel sample of 211 adopters from 31 countries over the period spanning 2009–2017, counting 1,455 observations. Our evidence confirms that adopters, on average, benefit from a 1.4% decrease in the cost of capital. Yet, more importantly, IR effectiveness is exalted in countries with low power distance, strong collectivism values, and high level of masculinity, while uncertainty avoidance, long‐term orientation, and indulgence do not seem to play any moderating role. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png Journal of International Financial Management & Accounting Wiley

Integrated reporting and cost of capital: The moderating role of cultural dimensions

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References (78)

Publisher
Wiley
Copyright
Copyright © 2020 John Wiley & Sons Ltd
ISSN
0954-1314
eISSN
1467-646X
DOI
10.1111/jifm.12113
Publisher site
See Article on Publisher Site

Abstract

Since its introduction, integrated reporting (IR) has triggered a rich debate covering several aspects, from the structure and the features of a document to the effects of its publication. Very recently, scholars have examined the negative relationship between IR and the cost of capital for firms, completely missing the opportunity to understand whether this fact is contingent on the cultural context that adopting companies operate in. We fill this gap by resorting to a panel sample of 211 adopters from 31 countries over the period spanning 2009–2017, counting 1,455 observations. Our evidence confirms that adopters, on average, benefit from a 1.4% decrease in the cost of capital. Yet, more importantly, IR effectiveness is exalted in countries with low power distance, strong collectivism values, and high level of masculinity, while uncertainty avoidance, long‐term orientation, and indulgence do not seem to play any moderating role.

Journal

Journal of International Financial Management & Accounting – Wiley

Published: Jun 1, 2020

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