Does the market reward integrated report quality?

Although some studies show the benefits of adopting integrated reporting (IR), its real value has not yet been sufficiently investigated. As integrated reporting development implies high costs for the company, the management has to evaluate the economic advantage of such investment. This study aims to establish whether a high quality IR influences firm market value. Specifically, we investigate whether shareholders take into account the good quality disclosure provided by IR in their investment assessments and reward the outstanding firms. We proxy high quality disclosure by the awards assigned to IRs published by a sample of South African listed companies for the period 2013 to 2016. Using event study methodology, we found out that the stock market reacts positively to award announcements, the value attributed by shareholders to the quality of IR is persistent, grows over time and is particularly high in non-financial companies. This evidence should encourage managers to invest in improving IR disclosure quality. Key words: Integrated reporting, corporate social responsibility, market value, disclosure quality, event study, shareholder.