Corporate Social Responsibility and Stock Liquidity: The Moderating Role of External Monitoring

Today, the development of a comprehensive corporate social responsibility reporting in order to create transparency and accountability in capital markets, attracted considerable attention. Therefore, the purpose of the present study is to investigate the relationship between corporate social responsibility reporting and stock liquidity and study the moderating effect of external monitoring on this relationship. The present study is concerned with examining the association between social responsibility and stock liquidity as well as exploring the moderating effect of external monitoring on this relation. A sample of 87 firms listed in Tehran Stock Exchange during 2013 to 2018 is examined. To analyze data and test hypotheses, the multivariate regression model based on panel data is used. The results show that there is a significant positive relationship between corporate social responsibility reporting and stock liquidity. In addition, the results indicate that external monitoring played a moderating role in the relationship between corporate social responsibility and stock liquidity and exacerbated the positive relationship between them. Research findings can be useful for investors, the Securities and Stock Exchange organization and other stakeholders for decision making.