10. Institutional Determinants of IR Disclosure Quality

The aim of this chapter is to study whether and how the institutional context where a company operates influences Integrated Reporting (IR) disclosure quality, as measured through a unique hand-collected dataset. Our results show strong empirical support for the hypothesis that a country’s institutional characteristics significantly shape IR disclosure quality. In particular, we find that disclosure quality is higher in civil law countries and in countries with higher employee protection, levels of market coordination, ownership concentration, education, density of trade unions, corporate social responsibility and economic development. Conversely, the higher the investor protection, the lower the IR disclosure quality. These results allow us to draw new insights on the nature of IR and its relationship with institutional contexts.