Corporate social responsibility rating, market attention and stock liquidity: Evidence from China
Yafei Li  1@  , Tiantian Tang  2@  , Liping Zou  3@  
1 : China Agriculture University
2 : Shandong University
3 : Massey University

This study examines the influence of corporate social responsibility (CSR) ratings on the liquidity of stocks, focusing on the role of market attention. Utilizing a comprehensive dataset from China's A-share listed companies spanning 2010 to 2020, our findings indicate that companies with superior CSR ratings consistently exhibit enhanced stock market liquidity. Our analysis of the underlying mechanisms reveals that capital market attention, alongside public and media interest, serve as critical conduits through which CSR ratings amplify stock liquidity. This effect is notably stronger in firms characterized by lower leverage, higher return on assets, lower book-to-market values, and higher Tobin's Q, particularly within East China. Additionally, positive investor sentiment significantly bolsters the relationship between CSR and stock liquidity. Our results affirm that CSR activities mitigate information asymmetry and foster the accumulation of social reputation capital, contributing novel insights into the existing literature through the lens of market attention.


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