Integrated reporting and agency costs : International evidence from voluntary adopters
Journal article
Obeng, Victoria A., Ahmed, Kamran and Cahan, Steven F.. (2021). Integrated reporting and agency costs : International evidence from voluntary adopters. European Accounting Review. 30(4), pp. 645-674. https://doi.org/10.1080/09638180.2020.1805342
Authors | Obeng, Victoria A., Ahmed, Kamran and Cahan, Steven F. |
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Abstract | We examine whether the practice of integrated reporting (IR) can reduce agency problems between managers and investors, resulting in lower agency costs. We construct a sample of firms that voluntarily use IR in practice, drawn from 35 countries, and find that firms that apply IR practice more extensively (high IR firms) are associated with lower levels of agency costs and more negative year-to-year changes in agency costs compared to other IR firms (low IR firms). We also find that the relation between the level of IR practice and agency costs is more negative in countries with a stakeholder orientation than in countries with a shareholder orientation. Additionally, the effectiveness of IR is more pronounced in diversified firms that face greater agency problems. Our results are robust in a series of additional tests that address endogeneity. Overall, our evidence is consistent with IR having a disciplining role for managers. |
Keywords | integrated reporting; agency costs; corporate governance; voluntary adoption |
Year | 2021 |
Journal | European Accounting Review |
Journal citation | 30 (4), pp. 645-674 |
Publisher | Routledge |
ISSN | 0963-8180 |
Digital Object Identifier (DOI) | https://doi.org/10.1080/09638180.2020.1805342 |
Scopus EID | 2-s2.0-85089579980 |
Page range | 645-674 |
Funder | La Trobe University |
University of Auckland | |
Publisher's version | License All rights reserved File Access Level Controlled |
Output status | Published |
Publication dates | |
Online | 18 Aug 2020 |
Publication process dates | |
Accepted | 26 Jul 2020 |
Deposited | 16 Jun 2023 |
https://acuresearchbank.acu.edu.au/item/8z226/integrated-reporting-and-agency-costs-international-evidence-from-voluntary-adopters
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