Integrated reporting (IR) has been proposed to “reform” corporate financial statements, fill gaps in existing reporting practices and provide a better understanding of financial and nonfinancial information in an integrated manner. The purpose of this study aims to provide empirical evidence of the role of IR in mediating the effect of ownership structure on firm performance.
Structural equation modeling on panel data are used to study the impact of the role of IR in mediating the effect of ownership structure on firm performance. The present empirical study was based on a sample of 431 European firms belonging to common or civil law between 2012 and 2020.
Based on empirical results, this study shows that IR plays a mediating role in the relationship between ownership structure attributes (ownership concentration, institutional ownership and managerial ownership) and the performance of European common law firms. In civil law countries, it only has a mediating effect on the relationship between institutional ownership and performance.
This study provides evidence for IR, ownership structure and firm performance. This chapter highlights the global need for a generally accepted set of standards for sustainability and IR practices.
