Abstract
The present study aims towards three research purposes. Firstly, it intends to reveal the pattern that associates the elements of the Integrated Reporting (IR) of companies listed on the Saudi Arabian Stock Exchange (Tadawul). Secondly, it verifies the existence of a relationship between IR practices and some firm-specific characteristics. Third, it examines the similarities between the IR practices of these companies. IR communicates how an organization's strategy, governance, performance, and prospects lead to value creation. The dataset used for the IR elements is retrieved from Tadawul and consists of data regarding integrated reports for 126 companies listed in 2019; while the data for the firm-specific characteristics, as the size of the company, the auditor type and the type of company are extracted from Marketscreener.com and Argaam.com portals. The methodology used consists of the empirical-analytical approach with the use of Optimal Scaling techniques. Main findings consist of a positive association found between the elements of the IR, as well as that the specific characteristics of the firms are not related to the elements of the IR. In our results a dissimilarity is found in the corporate information disclosure practices. These findings reveal a need for a deep investigation of the IR elements and firm characteristics in Saudi Arabian companies. One of the future research direction is a multilinear data for various years such that can reveal a more comprehensive understanding of IR elements and firm characteristics. This study becomes relevant in the context of IR elements and firm characteristics relations, that are not yet studies at their research potential.
Highlights
The global economy is continually changing as companies face global competition, technological innovations, and increased regulation in response to financial and governance crises (Flower, 2015)
The optimal scaling procedures used in this study allowed us to identify the 24 items of the integrated report that are most relevant in the context of Tadawul, as well as how they are related
It is clear that, in this context, the firm-specific characteristics run in a different dimension than the Integrated Reporting (IR) elements, implying that there is no relationship between the two
Summary
The global economy is continually changing as companies face global competition, technological innovations, and increased regulation in response to financial and governance crises (Flower, 2015). Culture and society question the underlying justification for the nature of a business organization as emphasis on business is limited and ignores the creation of value or justice for people, society and the world (Dumay et al, 2016) Due to this challenge, in recent years there has been a growing demand from stakeholders for companies to adopt policies related to environmental, social and governance (ESG) issues (McWilliams & Siegel, 2000; Flower, 2015) and for these topics to be incorporated into corporate reports (Adams & Frost, 2008; White, 2005). Regulatory offices and international standard setters have issued comprehensive regulations related to these subjects (Briano et al, 2012; Ahmed, 2013; Flower, 2015; Velte & Stawinoga, 2017), with the result being the Integrated Reporting (IR) concept
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