Integrated Reporting Quality: A Key Driver of Financial Performance in European Companies

Abstract This study investigates the impact of integrated reporting quality (IRQ) on the financial performance of European companies. The authors analyse a sample of 440 listed firms from the STOXX Europe 600 index, spanning the period from 2017 to 2023. First, the authors applied the Feasible Generalized Least Squares (FGLS) method to the data gathered from the Eikon Refinitiv and Asset4 databases. Second, the authors opted for the Generalised Moment Method (GMM) on a dynamic panel to assess the robustness of the authors’ results. The key findings indicate a positive and significant impact of IRQ on financial performance, as measured by ROA and Tobin’s Q, among companies listed in the STOXX Europe 600 index. The originality of this paper stems from its examination of the relationship between IRQ and financial performance, specifically within the European context of the STOXX 600 index, a topic that has received limited attention in current literature. This research also provides practitioners with valuable insights to improve the quality of their integrated reports. Furthermore, applying GMM to a dynamic panel yields more robust and reliable conclusions compared to previous research.