Integrated Reporting and Investor Clientele

By George Serafeim. 2015

295 citations recorded by the source corpus.

In this paper, I examine the relation between Integrated Reporting (IR) and the composition of a firm’s investor base. I hypothesize and find that firms that practice IR have a more long-term oriented investor base with more dedicated and fewer transient investors. This result is more pronounced for firms with high growth opportunities, not controlled by a family, operating in ‘sin’ industries, and exhibiting commitment to IR. I find that the results are robust to the inclusion of firm fixed effects, controls for the quantity of sustainability disclosure, and alternative ways of measuring IR. Moreover, I show that investor activism on environmental or social issues or a large number of concerns about a firm’s environmental or social impact leads a firm to practice more IR and that this investor or crisis-induced IR affects the composition of a firm’s investor base. Finally, firms that report more information about the different forms of capital or follow more closely the guiding principles as described in the IR Framework of the IIRC exhibit a more long-term oriented investor base.

Subfields: Accounting, Strategy and Management

View Paper: https://www.semanticscholar.org/paper/4607ae44299802f0c801dd55f2f12b62622f4ee2

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Citations in the corpus

Taste, information, and asset prices: implications for the valuation of CSR (2016, unknown): “Serafeim (2014) finds that firms that integrate their reporting of financial performance and sustainability activities (i.e., a dimension of CSR) tend to experience a shift towards more long-term and less short-term institutional investors.”
Corporate and Integrated Reporting: A Functional Perspective (2014, unknown): “Indeed, recent research suggests that ESG disclosure and performance affect corporations’ access to finance (Cheng, Ioannou, and Serafeim 2014).”
Re-theorizing the configuration of organizational fields: the IIRC and the pursuit of ‘Enlightened’ corporate reporting (2017, background): “…despite the proliferation of positive views from early integrated reporting adopters (see Black Sun and IIRC 2014) and some working papers showing evidence of an association between firms engaging in different forms of integrated reporting and a more longterm oriented investor base (Serafeim 2015).”
Integrated reporting: The current state of empirical research, limitations and future research implications (2016, background): “Serafeim (2015) analyses IR in US firms and finds that an organization’s capacity to demonstrate and communicate in a convincing manner that it integrates the economic, social and environmental dimensions into its day-to-day decision-making processes is linked to the long-term approach taken by its…”
Sensitive industries produce better ESG performance: Evidence from emerging markets (2017, methodology): “…and Benjamin, 2001; Bassen et al., 2006; Hong and Kacperczyk, 2009; Cheng et al., 2014) and if the majority of studies about the influence of ESG practices on the business risk use companies operating in developed economies (Richardson andWelker, 2001; Dhaliwal et al., 2011; Serafeim, 2014).”
Market Reaction to Mandatory Nonfinancial Disclosure (2019, unknown): “Prior research suggests that institutional investors, particularly asset owners such as large pension funds and investment arms of insurance companies, have been a driving force behind increases in these disclosures (Serafeim 2015).”