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Integrated reporting and cost of capital: The moderating role of cultural dimensions
Author(s) -
Vena Luigi,
Sciascia Salvatore,
Cortesi Alessandro
Publication year - 2020
Publication title -
journal of international financial management and accounting
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.818
H-Index - 37
eISSN - 1467-646X
pISSN - 0954-1314
DOI - 10.1111/jifm.12113
Subject(s) - hofstede's cultural dimensions theory , collectivism , uncertainty avoidance , context (archaeology) , indulgence , masculinity , capital (architecture) , sample (material) , economics , marketing , business , social psychology , psychology , political science , market economy , geography , archaeology , chemistry , chromatography , individualism , psychoanalysis , law
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.