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Corporate social responsibility and stock liquidity across the globe

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  • Nguyen, Van Ha
  • Dang, Tung Lam

Abstract

Our paper examines the impact of corporate social responsibility (CSR) on stock liquidity using a worldwide sample of 42,302 firm-year observations from 43 countries over the 2004˗2019 period. We find that firms with greater CSR are associated with higher levels of stock liquidity. This result is robust to employing alternative variable measures, modifying model specifications, altering sample compositions, and controlling for potential endogeneity including a difference-in-differences analysis based on mandatory ESG disclosure regulations that exogenously enhance firms’ CSR performance. Our further investigation suggests that this linkage can be justified by information asymmetry and internal governance channels. Moreover, the effect of CSR on stock liquidity is stronger in countries that exhibit better institutional quality and lower secrecy culture.

Suggested Citation

  • Nguyen, Van Ha & Dang, Tung Lam, 2025. "Corporate social responsibility and stock liquidity across the globe," International Review of Economics & Finance, Elsevier, vol. 101(C).
    • Handle: RePEc:eee:reveco:v:101:y:2025:i:c:s1059056025003454
    DOI: 10.1016/j.iref.2025.104182
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    JEL classification:

    • G10 - Financial Economics - - General Financial Markets - - - General (includes Measurement and Data)
    • G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill
    • G34 - Financial Economics - - Corporate Finance and Governance - - - Mergers; Acquisitions; Restructuring; Corporate Governance
    • G14 - Financial Economics - - General Financial Markets - - - Information and Market Efficiency; Event Studies; Insider Trading
    • M14 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - Corporate Culture; Diversity; Social Responsibility

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