Integrated Reporting Quality and Its Effect on the Financial Performance of Nigerian Listed Firms

This study examines the effect of integrated reporting quality (IRQ) on the financial performance of Nigerian-listed banking firms over the period 2010 to 2024. Using a panel dataset of 14 Deposit Money Banks (DMBs) quoted on the Nigerian Exchange Group (NGX), the study employs a fixed-effects panel regression framework augmented with Driscoll-Kraay standard errors to address heteroskedasticity, autocorrelation, and cross-sectional dependence. Integrated reporting quality is measured using a self-constructed disclosure index derived from the six content elements of the International Integrated Reporting Council (IIRC) framework, while financial performance is captured through three proxies: return on assets (ROA), return on equity (ROE), and Tobin's Q (TQ). Control variables include firm size (FS), firm profitability (FP), firm leverage (FLEV), growth opportunities (GO), firm age (FA), and liquidity (LIQ). Findings reveal that IRQ exerts a statistically significant and positive effect on all three measures of financial performance, suggesting that higher-quality integrated reporting reduces information asymmetry, enhances investor confidence, and lowers the cost of capital. These results are robust to alternative specifications and post-estimation diagnostics. The study contributes novel empirical evidence to the emerging integrated reporting literature in a developing economy context and provides actionable policy insights for regulators, investors, and corporate managers in Nigeria. The findings are consistent with legitimacy theory, stakeholder theory, and signalling theory, which collectively explain why voluntary and enhanced disclosure practices benefit firm value.