The Role of Reputation and Regulation in Shaping Non-Financial Information Reporting

Abstract

This study explores how corporate reputation and regulation influence the quantity and quality of non-financial information (NFI) disclosure. While internal drivers of NFI reporting are well-studied, external pressures remain underexplored. Analyzing Ibex35 firms (2015–2019) during Spain’s adoption of Directive 2014/95/EU, the study uses panel data analysis to assess the impact of reputation and regulation on NFI reporting. The findings show that highly reputed firms disclose more extensive and higher-quality NFI, while regulatory changes significantly improve both variables of NFI reporting. Thus, firms go beyond mere compliance. By distinguishing between quality and quantity, the study clarifies conflicting prior findings and highlights the complementary roles of reputation and regulation in fostering transparency. The results offer valuable insights for managers and policymakers, enhancing stakeholder trust and the effectiveness of regulation in promoting corporate transparency.