Corporate social responsibility (CSR) is currently receiving considerable attention. CSR is crucial for the sustainable development of an enterprise; in addition, an enterprise that practices CSR can improve its corporate image, attract the attention of investors, and increase the market liquidity of its shares. This study analyzed the stocks of Taiwan Stock Exchange and Taipei Exchange companies in Taiwan between January 2, 2000 and December 31, 2012 and explored the effect of winning a CSR award on investors’ willingness to invest and on market liquidity. Enterprises that won the Excellence in Corporate Social Responsibility Award from CommonWealth Magazine or the Corporate Social Responsibility Award from Global Views Monthly were selected for the study to examine the effect of winning a CSR award.
According to the empirical results, the variables of CSR awards from CommonWealth Magazine and Global Views Monthly significantly negatively influenced effective spread, quoted spread, relrelative effective spread, and relative quoted spread. Therefore, enterprises that win a CSR award can enhance their corporate image, reduce information asymmetry, and increase market liquidity.
