Is corporate social responsibility disclosure associated with stock liquidity? Evidence from Vietnam

Abstract

This study aims to examine whether corporate social responsibility disclosure (CSRD) is associated with stock liquidity in Vietnam’s prescribed reporting setting. Using 2,476 firm-year observations for 499 non-financial firms during 2015–2019, the study estimates firm and year fixed-effects models with firm-clustered standard errors. CSRD is measured by score and percentage; liquidity is measured by effective and quoted spreads. First-difference and one-year-lagged specifications assess robustness. Neither CSRD measure is significantly associated with either spread after firm-specific heterogeneity and common annual conditions are controlled for. The findings indicate that greater disclosure intensity alone does not necessarily reduce spread-based trading costs when reporting does not ensure comparable, credible and decision-useful information. The study is confined to Vietnamese non-financial firms within a specific timeframe. Future research could examine multiple countries, alternative liquidity measures and the credibility and investor use of disclosed information. Firms should not assume that increasing disclosure quantity will reduce spread-based trading costs. The findings emphasize reporting comparability, consistency, assurance and enforcement. Evidence on CSRD and stock-market liquidity remains mixed. Unlike positive findings based on externally assessed transparency, report events, global reporting initiative (GRI) adoption or mandatory reforms, this study finds no robust association for observed GRI-based disclosure intensity in Vietnam, consistent with evidence from Jordan. Disclosure volume may therefore convey a weaker market signal than standardized or salient disclosure changes.