Does the voluntary adoption of integrated reporting affect the value relevance of accounting information? Empirical evidence from Europe

This study verifies whether the voluntary adoption of an integrated report in Europe under the framework is associated with the value relevance of summary accounting information. We compare a sample of European listed companies that publish Integrated Reports (IR-firms) under the framework with companies that do not publish it (NIR-firms). To analyse the association between market value (MV) and traditional accounting information (book value and earnings), we use multivariate regression linear models and generalised linear models (GLM). The results of our analysis show that the adoption of IR appears to strongly affect the value relevance of summary accounting information. For IR-firms, we find significant lower value relevance for earnings and slightly higher value relevance for book value, compared to NIR-firms. Additionally, our findings reveal that for both groups the level of investments on intangibles is positively associated to market value but with a significantly higher association for the IR-firms.