Abstract
This study investigates how internal and external transparency influence stock price informativeness in emerging markets. Internal transparency is measured through corporate governance and product market competition, while external transparency is proxied by the Press Freedom Index and analyst following. The analysis covers 1,256 listed firms across 24 emerging economies from 2002 to 2022, employing pooled OLS, fixed effects, 2SLS, and DGMM estimators. Robustness checks include replacing the Press Freedom Index with the Worldwide Governance Indicator and excluding India and South Korea to mitigate sample bias. Results show that corporate governance significantly enhances stock price informativeness: a one-unit increase in corporate governance score raises informativeness by 0.0032–0.0054%, with significance levels ranging from 1% to 10%. In contrast, higher external transparency reduces informativeness, with press freedom decreasing it by 0.0054% and the Worldwide Governance Indicator by 0.11–0.18%, significant at the 1%–10% levels. The interaction between corporate governance and press freedom reveals a substitutive effect, suggesting that strong governance mitigates reliance on external transparency in shaping informative stock prices. These findings offer policy insights on striking a balance between governance and transparency mechanisms. They also align with UN SDG 12 by encouraging sustainable practices and greater transparency for informed decision-making.