This paper aims to investigate the determinants of integrated reporting (IR) and its association with firm value and liquidity in the context of voluntary adoption. The data cover the period 2013–2018 of all banking companies of Bangladesh that construct 144 firm-year observations. An IR index is developed using international IR framework 2013, and content analysis is performed to measure IR adoption and practice. In addition to ordinary least squares regression, two-stage least squares method is used to minimize the endogeneity concerns. The result claims that banks with bigger board size, higher proportion of female and independent directors, and larger growth opportunity are more likely to adopt and practice IR. This paper documents that IR practice has a significant positive impact on the firm value, which is consistent with the theoretical prediction of corporate disclosure and firm value. Alternatively, the result does not suggest any conclusive evidence on the association between IR practice and stock liquidity. The findings of this paper could assist the regulators for preparing and issuing guidelines for this new reporting paradigm. This research, however, acknowledges the small firm-year observations and subjective judgment of self-constructed IR score.
This is a preview of subscription content, access via your institution.
Buy single article
Instant access to the full article PDF.
Tax calculation will be finalised during checkout.
Subscribe to journal
Immediate online access to all issues from 2019. Subscription will auto renew annually.
Tax calculation will be finalised during checkout.
Adams, C.A. 2015. The international integrated reporting council: A call to action. Critical Perspectives on Accounting 27: 23–28.
Ahmed, A., R.M. Monem, D. Delaney, and C. Ng. 2017. Gender diversity in corporate boards and continuous disclosure: Evidence from Australia. Journal of Contemporary Accounting and Economics 13(2): 89–107.
Albertini, E. 2019. Integrated reporting: An exploratory study of French companies. Journal of Management and Governance 23(2): 513–535.
Barth, M.E., S.F. Cahan, L. Chen, and E.R. Venter. 2017. The economic consequences associated with integrated report quality: Capital market and real effects. Accounting, Organizations and Society 62(2017): 43–64.
Bartov, E., and G.M. Bodnar. 1996. Alternative accounting methods, information asymmetry and liquidity: Theory and evidence. The Accounting Review 71(3): 397–418.
Ben-Amar, W., M. Chang, and P. McIlkenny. 2017. Board gender diversity and corporate response to sustainability initiatives: Evidence from the carbon disclosure project. Journal of Business Ethics 142(2): 369–383.
Biswas, P.K. 2020. Corporate governance and stock liquidity: Evidence from a speculative market. Accounting Research Journal 33(2): 323–341.
Brown, S., and S.A. Hillegeist. 2007. How disclosure quality affects the level of information asymmetry. Review of Accounting Studies 12(2–3): 443–477.
Busco, C., I. Malafronte, J. Pereira, and M.G. Starita. 2019. The determinants of companies’ levels of integration: Does one size fit all? British Accounting Review 51(3): 277–298.
Cortesi, A., and L. Vena. 2019. Disclosure quality under integrated reporting: A value relevance approach. Journal of Cleaner Production 220: 745–755.
de Villiers, C., E.R. Venter, and P.C.K. Hsiao. 2017. Integrated reporting: Background, measurement issues, approaches and an agenda for future research. Accounting and Finance 57(4): 937–959.
Dilling, P.F.A., and S. Caykoylu. 2019. Determinants of companies that disclose high-quality integrated reports. Sustainability 11(13): 3744.
Dumay, J., C. Bernardi, J. Guthrie, and P. Demartini. 2016. Integrated reporting: A structured literature review. Accounting Forum 40(3): 166–185.
Francis, J., D. Nanda, and P. Olsson. 2008. Voluntary disclosure, earnings quality, and cost of capital. Journal of Accounting Research 46(1): 53–99.
García-Sánchez, I.M., and L. Noguera-Gámez. 2017. Integrated reporting and stakeholder engagement: The effect on information asymmetry. Corporate Social Responsibility and Environmental Management 24(5): 395–413.
Gerwanski, J., O. Kordsachia, and P. Velte. 2019. Determinants of materiality disclosure quality in integrated reporting: Empirical evidence from an international setting. Business Strategy and the Environment 28(5): 750–770.
Ghani, E.K., J. Jamal, E. Puspitasari, and A. Gunardi. 2018. Factors influencing integrated reporting practices among Malaysian public listed real property companies: A sustainable development effort. International Journal of Managerial and Financial Accounting 10(2): 144–162.
Gietzmann, M., and J. Ireland. 2005. Cost of capital, strategic disclosures and accounting choice. Journal of Business Finance and Accounting 32(3–4): 599–634.
Healy, P.M., and K.G. Palepu. 2001. Information asymmetry, corporate disclosure, and the capital markets: A review of the empirical disclosure literature. Journal of Accounting and Economics 31: 405–440.
International Integrated Reporting Council [IIRC]. 2013. International <IR> framework. The International Integrated Reporting Council. available at: https://integratedreporting.org/resource/international-ir-framework/.
Islam, R., and M.R. Islam. 2018. Insights the practice of integrated reporting: A study on MNCs in Bangladesh on the degree of adherence to the reporting framework. Open Journal of Business and Management 06(03): 733–748.
Kathy Rao, K., C.A. Tilt, and L.H. Lester. 2012. Corporate governance and environmental reporting: An Australian study. Corporate Governance: The International Journal of Business in Society 12(2): 143–163.
Khlif, H., K. Hussainey, and I. Achek. 2015. The effect of national culture on the association between profitability and corporate social and environmental disclosure: A meta-analysis. Meditari Accountancy Research 23(3): 296–321.
Kılıç, M., and C. Kuzey. 2018a. Assessing current company reports according to the IIRC integrated reporting framework. Meditari Accountancy Research 26(2): 305–333.
Kılıç, M., and C. Kuzey. 2018b. Determinants of forward-looking disclosures in integrated reporting. Managerial Auditing Journal 33(1): 115–144.
Lee, K.W., and G.H.H. Yeo. 2016. The association between integrated reporting and firm valuation. Review of Quantitative Finance and Accounting 47(4): 1221–1250.
Lemma, T.T., A. Khan, B.M. Muttakin, and G.D. Mihret. 2019. Is integrated reporting associated with corporate financing decisions? Some empirical evidence. Asian Review of Accounting 27(3): 425–443.
Leuz, C., and P.D. Wysocki. 2016. The economics of disclosure and financial reporting regulation: Evidence and suggestions for future research. Journal of Accounting Research 54(2): 525–622.
Martinez, C. 2016. Effects of integrated reporting on the firm’s value: Evidence from voluntary adopters of the IIRC’s framework. Ssrn. https://doi.org/10.2139/ssrn.2876145.
Mohammad, N. 2019. Integrated reporting practice and disclosure in Bangladesh’s banking sectors. Indonesian Journal of Sustainability Accounting and Management 3(2): 147–161.
Nakib, M., and P.K. Dey. 2018. The journey towards integrated reporting in Bangladesh. Asian Economic and Financial Review 8(7): 894–913.
Nielsen, S., and M. Huse. 2010. The contribution of women on boards of directors: Going beyond the surface. Corporate Governance: An International Review 18(2): 136–148.
Orlitzky, M., F.L. Schmidt, and S.L. Rynes. 2003. Corporate social and financial performance: A meta-analysis. Organization Studies 24(3): 403–441.
Pavlopoulos, A., C. Magnis, and G.E. Iatridis. 2019. Integrated reporting: An accounting disclosure tool for high quality financial reporting. Research in International Business and Finance 49(February): 13–40.
Rinaldi, L., J. Unerman, and C. de Villers. 2018. Evaluating the integrated reporting journey: Insights, gap and agendas for future research. Accounting, Auditing & Accountability Journal 31(5): 1294–1318.
Roman, A., M. Mocanu, and R. Hoinaru. 2019. Disclosure style and its determinants in integrated reports. Sustainability 11: 1960.
Serafeim, G. 2015. Integrated reporting and investor clientele. Journal of Applied Corporate Finance 27(2): 34–51.
Suttipun, M. 2017. The effect of integrated reporting on corporate financial performance: Evidence from Thailand. Corporate Ownership and Control 15(1): 133–142.
Velte, P., and M. Stawinoga. 2017. Integrated reporting: The current state of empirical research, limitations and future research implications. Journal of Management Control 28(3): 275–320.
Vitolla, F., N. Raimo, and M. Rubino. 2019. Appreciations, criticisms, determinants, and effects of integrated reporting: A systematic literature review. Corporate Social Responsibility and Environmental Management 26(2): 518–528.
Vitolla, F., N. Raimo, M. Rubino, and A. Garzoni. 2020. The determinants of integrated reporting quality in financial institutions. Corporate Governance 20(3): 429–444.
Wahl, A., Charifzadeh, M., & Diefenbach, F. 2020. Voluntary adopters of integrated reporting—Evidence on forecast accuracy and firm value. Business Strategy and the Environment n/a(n/a)
Zhou, S., R. Simnett, and W. Green. 2017. Does integrated reporting matter to the capital market? Abacus 53(1): 94–132.
The author is sincerely grateful to Professor Roberto Leon-Gonzalez and Professor Nobuhiro Hosoe of the National Graduate Institute for Policy Studies (GRIPS) and the discussant and other participants at the 8th GRIPS Student Conference 2019 in Tokyo for their insightful comments and suggestions. He would like to thank Ronald Strauss (Editor in Chief) and the anonymous reviewer of the journal for their constructive comments.
Conflict of interest
The author declares that he has no conflict of interest.
Springer Nature remains neutral with regard to jurisdictional claims in published maps and institutional affiliations.
Integrated Reporting (IR) Index
|Main content element||Item|
|1. Organizational overview and external environment||Mission, vision, culture, ethics, and values|
|Ownership and operating structure|
|Principal activities and markets|
|Competitive landscape and market positioning|
|Position within the value chain|
|Key quantitative information, e.g., total employees, revenue|
|Legitimate needs and interests of stakeholders|
|Macro- and micro-economic conditions|
|Technological changes and its effect|
|Legislative and regulatory environment|
|2. Governance||Leadership structure including skills and diversity|
|Adoption of code of corporate governance and ethical conduct|
|Specific processes for strategic decisions, risk management, and addressing integrity and ethical issues|
|Reflection of culture, ethics, and values on the capitals|
|Governance practices, promoting and enabling innovation|
|Link of remuneration and incentives with value creation|
|3. Business model||Key elements of business model|
|Inputs (stock of capitals)|
|Key business activities|
|Product and services including by-product and waste|
|Outcomes (internal and external; positive and negative)|
|Multiple business model, extent of connectivity, and synergetic benefits|
|4. Risk, opportunities, and internal controls||Specific sources of risks and opportunities|
|Assessment of likelihood and effect|
|Specific action steps taken|
|Risk management report|
|Effectiveness of internal controls|
|5. Strategy and resource allocation||Short-, medium-, and long-term strategic objectives and its intends|
|Resource allocation plans|
|Measurement of achievements and target outcomes|
|Connection between strategy and resource allocation plans and other content elements|
|Differentiation in terms of competitive advantage and value creation|
|6. Performance||Quantitative indicators connecting targets, risks, and opportunities|
|Both positive and negative effects on capitals|
|Key relationships and its response|
|Connection between past and present performance|
|KPIs combining financial performance with other capitals|
|Significant impact of regulations on performance|
|7. Outlook||Challenges and uncertainties in pursuing objectives and strategy|
|Potential respond to challenges and uncertainties|
|Potential implications for business and future performance|
|Potential external effects on the attainment of strategic objectives|
|Factors of capitals and its potential effects on the ability to create value|
|8. Basis of preparation and presentation||Summary of materiality determination process|
|Description of reporting boundary and its determination|
|Frameworks and methods used to evaluate material matters|
About this article
Cite this article
Dey, P.K. Value relevance of integrated reporting: a study of the Bangladesh banking sector. Int J Discl Gov 17, 195–207 (2020). https://doi.org/10.1057/s41310-020-00084-z
- Banking sector
- Content analysis
- Firm value
- Integrated reporting
- Stock liquidity