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New Challenges in Accounting and Finance
Article . 2021 . Peer-reviewed
Data sources: Crossref
image/svg+xml art designer at PLoS, modified by Wikipedia users Nina, Beao, JakobVoss, and AnonMoos Open Access logo, converted into svg, designed by PLoS. This version with transparent background. http://commons.wikimedia.org/wiki/File:Open_Access_logo_PLoS_white.svg art designer at PLoS, modified by Wikipedia users Nina, Beao, JakobVoss, and AnonMoos http://www.plos.org/
image/svg+xml art designer at PLoS, modified by Wikipedia users Nina, Beao, JakobVoss, and AnonMoos Open Access logo, converted into svg, designed by PLoS. This version with transparent background. http://commons.wikimedia.org/wiki/File:Open_Access_logo_PLoS_white.svg art designer at PLoS, modified by Wikipedia users Nina, Beao, JakobVoss, and AnonMoos http://www.plos.org/
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Article . 2021
License: CC BY
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Voluntary Disclosure of Integrated Reporting and cost of Capital in Brazil: an Alternative Explanation

Authors: Castelo, Debora Ximenes de Aragao Vale; Nossa, Valcemiro; Costa, Fabio Moraes da; Monte-Mor, Danilo Soares;

Voluntary Disclosure of Integrated Reporting and cost of Capital in Brazil: an Alternative Explanation

Abstract

There is an ongoing debate about whether integrated reporting should be mandatory or voluntary. Empirical evidence mostly focused on South African mandatory disclosures, indicate that the firm’s information environment is relevant to explain the effects on the cost of capital. However, results based on voluntary disclosures indicate that the country’s level of enforcement explains the effects. This paper analyses the effects of voluntary disclosures of integrated reports on the cost of capital for Brazilian listed companies. Our design is developed to control the level of enforcement and evaluate if firm‐specific characteristics may explain the effects on information asymmetry related to the disclosure of integrated financial and non‐financial informaƟon. We collect data from 2014 to 2017 and compare the effects on capital cost for a group of firms that voluntarily disclose integrated reports with a control group identified via Propensity Score Matching. We can identify that larger firms, with stronger corporate governance and lower risk, are more likely to voluntarily disclose integrated reports. In our second stage, we find no effect on the cost of capital after the voluntary disclosure. Taken together, our results are aligned with prior studies focused on mandatory disclosures: the firm’s information environment is relevant to explain the potential capital market benefits of Integrated Reporting.

Related Organizations
Keywords

Voluntary Disclosure, Cost of Capital, Integrated Reporting, Propensity Score Matching

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selected citations
These citations are derived from selected sources.
This is an alternative to the "Influence" indicator, which also reflects the overall/total impact of an article in the research community at large, based on the underlying citation network (diachronically).
BIP!Citations provided by BIP!
popularity
This indicator reflects the "current" impact/attention (the "hype") of an article in the research community at large, based on the underlying citation network.
BIP!Popularity provided by BIP!
influence
This indicator reflects the overall/total impact of an article in the research community at large, based on the underlying citation network (diachronically).
BIP!Influence provided by BIP!
impulse
This indicator reflects the initial momentum of an article directly after its publication, based on the underlying citation network.
BIP!Impulse provided by BIP!
1
Average
Average
Average
Green
gold