This study examines the influence of textual coherence on the informativeness of annual integrated reports in South Africa. Using latent semantic analysis (LSA) to measure coherence, I demonstrate that the informativeness of integrated reports is positively associated with their coherence. Further analysis reveals that coherence mitigates the negative effects of linguistic complexity, captured by the Fog Index, on report informativeness and stock price delay. My findings contribute to the growing literature on integrated reporting (IR) by documenting a potential benefit for investors and also suggest that the Fog Index or other traditional measures of linguistic complexity may not be sufficient to gauge the consequences of IR adoption on the informativeness of annual reports.
|Number of pages||25|
|Journal||China Accounting and Finance Review|
|Publication status||Published - Mar 2021|