Integrated Reporting Quality as a Determinant of Financial Performance: Evidence from Emerging and Developed Markets

This study aims to clarify the effects of integrated reporting quality (IRQ) on financial performance indicators. To do so, this paper is based on measuring IRQ by scoring integrated reports of 82 firms with a 328-firm observation from both emerging and developed markets, where they published integrated reports or integrated annual reports between 2019 and 2022. This study is based on a scoring method that considers the elements of the entire integrated reporting (IR) framework to measure quality and various financial performance indicators. The research brings originality to the literature due to the lack of uniformity among studies, especially in industry and market effects settings, to reveal meaningful results. Unlike the existing literature, the results of this paper are more reliable and consistent, depending on the use of panel data analysis and an endogeneity check. The findings show that a significant relationship exists between IRQ and "return on assets", "return on equity", and "earnings per share" in a varying degree of impact, where "board size" and "audit committee meeting" have no impact. There are no significant differences in whether the integrated reporters are located in emerging or developed markets. Therefore, strict application of the IR framework is essential to ensure IR quality, leading to improved financial performance regardless of the distinction between emerging and developed markets. Firms should consider the IR framework in their practices as a way to improve quality and to be transparent and accountable.