The moderating effect of external financing on the relationship between integrated reporting and firm value in Egypt
Journal of Financial Reporting and Accounting
ISSN: 1985-2517
Article publication date: 9 November 2022
Abstract
Purpose
This study aims to investigate the moderating effect of external financing needs on the relationship between the disclosure level of integrated reporting (IR) and firm value using evidence from Egypt.
Design/methodology/approach
This study uses a panel regression analysis for a matched sample of 50 companies listed on the Egyptian Stock Exchange (EGX), specifically from EGX100. The sample covers four years (2017–2020). The current study uses content analysis to measure IR and Tobin’s Q as a proxy for firm value.
Findings
The findings reveal a significant positive relationship between the disclosure level of IR and firm value. In addition, the authors find that external financing needs moderate the relationship between IR and firm value. It is concluded that the higher the disclosure level of IR content, the higher the firm’s value, and that this relationship strengthens in firms with high needs for external financing.
Practical implications
Several practical implications can be derived from the results of the current study. Policymakers and regulators can impose mandatory requirements for IR in Egypt. It also opens new insights for board members, managers, analysts and auditors in forming financing decisions based on annual reports.
Originality/value
The present study has a novel insight from a developing country and significant contributions to the extant literature. The study provides empirical evidence from an emerging economy and an insight into how external financing can be used for firms with different levels of IR. It also provides a comprehensive disclosure index to estimate the level of IR.
Keywords
Citation
Abogazia, A.H., Hashim, H.A., Salleh, Z. and Ettish, A.A. (2022), "The moderating effect of external financing on the relationship between integrated reporting and firm value in Egypt", Journal of Financial Reporting and Accounting, Vol. ahead-of-print No. ahead-of-print. https://doi.org/10.1108/JFRA-05-2022-0195
Publisher
:Emerald Publishing Limited
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