The Impact of Disclosure of Information Integrated Business Reports in Attracting Foreign Direct Investment an Applied Study on Industrial Companies Listed on The Amman Stock Exchange

Abstract

The study aimed to know the impact of disclosure of information in integrated business reports, including its elements (organizational overview and external environment, governance, business model, risk and opportunities, strategy and resource allocation, performance, outlook and the basis of presentation) on attracting direct foreign investment. This study used the descriptive and deductive analytical approach as it is relevant to the nature and objectives of the study. The E-Views software was employed to process the primary statistical data extracted from the financial statements of 35 industrial companies listed on the Amman Stock Exchange for a period of 5 years from 2015 - 2019, with 175 observations. The researcher adopted the method of content analysis of the information disclosed for the elements of the integrated business reporting (the independent variable). The list of disclosure indicators was developed based on “the content elements of integrated business reporting” in accordance with the integrated business reporting framework issued by the International Integrated Business Reporting Council (IIRC). The foreign ownership percentage was taken at the end of financial period regarding as proxy of direct foreign investment (the dependent variable). Cross-sectional time series data (panel data) was used in this study; This is in order to estimate the parameters of the study model to reach conclusions that explain the relationship between the independent and dependent variables. The most important finding of the study is that foreign direct investment in industrial companies listed on the Amman Stock Exchange is considered weak, as the average is (26.2%). In addition, there is a positive explanatory relationship between the disclosure of information in the integrated business reporting represented in (organizational overview and external environment, governance, business model, risk and opportunities, strategy and resource allocation, performance, outlook and the basis of  presentation) in attracting foreign direct investment in industrial companies listed on the Amman Stock Exchange. Among the most important recommendations that suggested by the study was the necessity for the management of companies listed on the Amman Stock Exchange to adopt integrated business reporting in disclosing the corporate information because of its many benefits to investors and their impact on improving the investment climate in the Hashemite Kingdom of Jordan.