Financial inclusiveness and the stock market information environment

This study investigates the impact of country-level financial inclusiveness (financial inclusion and financial development) on the stock market information environment, which encompasses price informativeness, future investment, market liquidity, and analyst coverage. The connection between financial inclusiveness and price informativeness highlights the unexploited interplay between financial institutions and financial markets. Using a sample of over 300,000 observations from 45 countries, this study shows that greater financial inclusiveness increases stock price informativeness globally. Financial inclusiveness also increases firms' future investment and market liquidity, but decreases analyst coverage, suggesting that analysts play an information provider role rather than an information intermediary role.