Value Reporting and Firm Performance

Forthcoming, Journal of International Accounting, Auditing and Taxation

66 Pages Posted: 6 Jul 2011 Last revised: 20 May 2020

See all articles by Florian Eugster

Florian Eugster

University of St. Gallen - Institute of Accounting, Control and Auditing

Alexander F. Wagner

University of Zurich - Department of Banking and Finance; Centre for Economic Policy Research (CEPR); European Corporate Governance Institute (ECGI); Swiss Finance Institute

Date Written: July 25, 2019

Abstract

Proponents of the concept of "value reporting" emphasize the idea that it may be in firms' interest to provide investors and other stakeholders with a holistic picture of their value generation activities. The basic idea is that by explaining more clearly how and why value is created in the company, especially by considering the interplay of financial and non-financial value drivers, management will enhance its own understanding of the value generation process. This, in turn, enables management to make better operating decisions in the future. Using a 10-year panel of Swiss firms, we document that firms with better value reporting quality deliver better future operating performance and obtain greater economic value added. They also exhibit higher valuation ratios. These results hold when controlling for industry-year fixed effects as well as with two instrumental variables approaches. These findings also shed light on the potential value generation benefits of "integrated reporting".

Keywords: corporate disclosure quality, integrated reporting, firm value, operating performance, value reporting

JEL Classification: G11, G14, M41

Suggested Citation

Eugster, Florian and Wagner, Alexander F., Value Reporting and Firm Performance (July 25, 2019). Forthcoming, Journal of International Accounting, Auditing and Taxation, Available at SSRN: https://ssrn.com/abstract=1879804 or http://dx.doi.org/10.2139/ssrn.1879804

Florian Eugster

University of St. Gallen - Institute of Accounting, Control and Auditing ( email )

St.Gallen, 9000
Switzerland

Alexander F. Wagner (Contact Author)

University of Zurich - Department of Banking and Finance ( email )

Plattenstrasse 14
Zürich, 8032
Switzerland
+41 44 634 3963 (Phone)

Centre for Economic Policy Research (CEPR) ( email )

London
United Kingdom

European Corporate Governance Institute (ECGI) ( email )

c/o the Royal Academies of Belgium
Rue Ducale 1 Hertogsstraat
1000 Brussels
Belgium

Swiss Finance Institute ( email )

Switzerland

HOME PAGE: http://www.alex-wagner.com

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