Stock Liquidity and Corporate Social Responsibility | |
Xin (Simba) Chang1; Weiqiang Tan2; Endong Yang3![]() | |
2019 | |
Conference Name | 31st Australasian Finance and Banking Conference 2018 |
Source Publication | proceedings of 31st Australasian Finance and Banking Conference 2018 |
Conference Date | December 13-15, 2018 |
Conference Place | Sydney NSW 2052 , Australia |
Abstract | We show that stock liquidity negatively affects firms’ corporate social responsibility (CSR) ratings. To identify the causal effect, we use the decimalization of stock trading as an exogenous shock to liquidity. The negative CSR effect of liquidity is more pronounced for firms where short-term institutional ownership is higher, CEOs’ wealth is more sensitive to firm value, CEOs approach the retirement age, analyst coverage is higher, or there are more covenants on firms’ bank debt. These findings suggest that high stock liquidity increases short-termism pressure and discourages firms from engaging in CSR activities, which are long-term in nature. Overall, our analysis reveals the potential disincentives created by stock liquidity in aligning the interest of shareholders and other stakeholders. |
Keyword | Stock Liquidity Short-termism Corporate Social Responsibility (Csr) Investor Horizon |
Language | 英语 |
Fulltext Access | |
Document Type | Conference paper |
Collection | Faculty of Business Administration DEPARTMENT OF FINANCE AND BUSINESS ECONOMICS |
Affiliation | 1.Nanyang Business School, Nanyang Technological University 2.Hong Kong Baptist University 3.University of Macau 4.The Chinese University of Hong Kong (CUHK) - Department of Finance |
Recommended Citation GB/T 7714 | Xin ,Weiqiang Tan,Endong Yang,et al. Stock Liquidity and Corporate Social Responsibility[C],2019. |
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