Does Integrated Reporting Enhance the Value Relevance of Corporate Governance? Evidence from Saudi Arabia

Abstract

This study examines how corporate governance (CG) and integrated reporting (IR) are associated with firm value and whether IR moderates the relationship between CG and firm value. Based on the agency theory and signaling theory, the results show that CG leads to improved monitoring, accountability, and strategic management processes while IR creates an opportunity to increase market confidence through the provision of connected, transparent and decision-useful information. The study uses a panel dataset of 80 firms listed on the Saudi Stock Exchange during 2020–2025, comprising 480 firm–year observations; the inclusion of a one-year-lagged variable reduced the estimation sample to 400 observations. CG was measured using a composite index of seven governance indicators, while IR was measured using a 58-item binary disclosure index. For the empirical analysis, random-effects regression, fixed-effects regression, and two-step system GMM were employed. The results reveal that CG and IR are positively related to firm value. Importantly, IR positively moderates the relationship between CG and firm value. This study demonstrates that IR enhances the value implication of CG among Saudi-listed firms.