A study on the relationship between capital items defined in integrated reporting as a type of corporate reporting and value creation process

Integrated reporting ensures that financial and non-financial information of companies can be presented in connection with each other. Through integrated reporting, the value creation process can be accurately conveyed to information users. In this process, capital items are used to transfer to information users. Qualitative and quantitative key performance indicators are used in the presentation of capital items. Key performance indicators determined in integrated reporting play an important role in explaining the value creation process fully, completely and accurately. In this context, the purpose of this Study is to determine the relationship between capital items in the International Integrated Reporting Framework and the value creation process by revealing both qualitative and quantitative key performance indicators. Within the scope of the research, the reports published between 2010-2019 by companies outside the financial sector included in the Borsa Istanbul (BIST) Sustainability Index were examined. In the qualitative determination of capital items, explanations made by companies in the context of intellectual, human, social and relational, natural capital were taken into account. In its quantitative determination, the expenditures made for all capital items are taken as the basis. On the other hand, in determining business values, value-based (Economic Value Added, Market Value Added), market-based (Tobin Q, Market Value/Book Value, Residual Value) and accounting-based (Return on Equity, Return on Assets, Economic Performance, Financial Performance, Total Added Value/Total Revenue) measurements are used. The relationship of the relevant capital items with the company value was tested through panel regression models. As a result of the analyzes, it has been determined that the capital items consisting of Intellectual, Human, Social and Relational and Natural Capital Disclosures measured qualitatively have a positive relationship with the value of the companies. On the other hand, a positive relationship was found between Intellectual Value Added Coefficient, Human Capital Expenditures, Social and Relational Capital Expenditures, which are the capital items measured quantitatively by the value of the companies, and a negative relationship with Natural Capital Expenditures. On the other hand, a negative relationship was found between the value of companies and the ratio of tangible assets, which is considered as produced capital, and financing expenses, that is considered as financial capital, and a positive relationship with profit shares, which is also considered as financial capital.