Citation

Tay, Lee Ying (2026) Corporate governance mechanisms and stock price informativeness: The moderating role of press freedom and analyst following in emerging markets. PhD thesis, Multimedia University.

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Abstract

This study examines corporate governance mechanisms and external transparency mechanisms in jointly influencing stock price informativeness in emerging markets, where institutional quality and information environments vary substantially. Corporate governance is conceptualised by two dimensions: Firm-level governance and product market competition. Firm-level governance helps to oversee and ensure proper disclosure of firm-specific information to the public, while product market competition forces by disciplining and incentivising managers to disclose information that reduces information asymmetry. External transparency is captured through two dimensions: Press Freedom Index, which proxies the level of media openness and institutional information flow, and analyst following, which represents external monitoring and third-party information dissemination. The empirical investigation is based on an unbalanced panel dataset comprising 1,256 publicly listed firms across 24 emerging countries, covering 21 years of data from 2002 to 2022. Several econometric approaches are employed to ensure robust inference, including pooled Ordinary Least Squares, Fixed Effects Models, Two-Stage Least Squares to correct for endogeneity, and the Dynamic Generalised Method of Moments (DGMM) to account for persistence and the dynamic nature of stock price informativeness. Additional robustness tests are conducted by replacing the Press Freedom Index with the Worldwide Governance Indicators and by excluding selected countries from the sample to mitigate concerns about sample bias. The findings provide three key insights. First, firm-level governance consistently shows a positive relationship in influencing stock price informativeness, underscoring the importance of internal governance in enhancing firm-specific information flow and transparency. Second, contrary to conventional expectations, press freedom is negatively associated with stock price informativeness in emerging markets. This does not imply that press freedom is inherently detrimental; instead, it may expand non-official or non-firm-specific information flows in emerging markets, which create informational noise that can weaken the incorporation of firm fundamentals into stock prices. Third, the interaction between corporate governance and press freedom reveals a substitutive effect: strong internal governance relies less on the external transparency mechanism to disclose firm nformation. In addition, the results remain robust when an alternative institutional transparency proxy is used. This study contributes to the literature by offering a comprehensive framework that integrates both the internal and external transparency mechanisms in explaining stock price informativeness in emerging markets. It also provides policy and investment implications by demonstrating that firm-level governance is crucial when institutional transparency is weak. More broadly, the findings support the aims of the United Nations Sustainable Development Goal 12 by emphasising transparency, accountability, and sustainable corporate practices in emerging financial markets.

Item Type:	Thesis (PhD)
Additional Information:	Call No.: HD2741 .T39 2026
Uncontrolled Keywords:	Corporate governance
Subjects:	H Social Sciences > HD Industries. Land use. Labor > HD2350.8-2356 Large industry. Factory system. Big business > HD2709-2930.7 Corporations. Including international business enterprises, diversification, industrial concentration, public utilities > HD2741 Holding companies. Corporate governance
Divisions:	Faculty of Business (FOB)
Depositing User:	Ms Nurul Iqtiani Ahmad
Date Deposited:	05 Nov 2026 11:41
Last Modified:	05 Nov 2026 11:41
URII:	http://shdl.mmu.edu.my/id/eprint/17071

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