The Value-Relevance of Voluntary Integrated Reporting - A Cross-Country Analysis of Germany and the United Kingdom

Integrated Reporting has attracted much attention in recent years. As fairly new and innovative form of corporate disclosure, it received support from accountants, regulators and standard-setters. It has been discussed as logical consequence of modern corporate reporting. However, there has been no widespread adoption of Integrated Reporting in practice due to the limited evidence of its clear benefits. While extant studies provided initial insights on the positive association between Integrated Reporting and capital market benefits, their results are mainly limited to the mandatory adoption context of South Africa and are subject to methodological shortcomings. As a result, there is a need to investigate the usefulness of Integrated Reporting in voluntary settings. This dissertation addresses this research gap by examining the extent and impact of voluntary Integrated Reporting adoption on equity market value in Germany and the United Kingdom. In contrast to previous studies, this dissertation considers both firms that self-declare to be adopters of Integrated Reporting and firms that do not explicitly refer to their corporate reports that way. The content analysis of corporate reports shows that sample firms are reporting in an increasingly integrated manner over time. Firms based in the United Kingdom prepare corporate reports more aligned with the requirements of the International Integrated Reporting Framework than German firms. The empirical analysis provides significant evidence for the positive association between the degree of Integrated Reporting in corporate reports and equity market value. Therefore, voluntary Integrated Reporting adoption can be deemed value-relevant. Also, the empirical results suggest that greenwashing or window dressing are ineffective strategies in the context of Integrated Reporting. Only the self-declared adopters of Integrated Reporting publishing corporate reports more aligned with the requirements of the International Integrated Reporting Framework benefit from positive capital market consequences.