Multiple Global <scp>CSR</scp> Pronouncements and Market Liquidity—Evidence From European Union

ABSTRACT This study investigates the impact of Corporate Social Responsibility (CSR) frameworks/standards/guidelines (hereafter ‘pronouncements’) on market liquidity (proxied by bid‐ask spread) for 3012 firms from 21 European Union countries for the years 2015–2019. The results suggest that use of multiple CSR pronouncements is negatively associated with bid‐ask spread. These results remain robust after addressing endogeneity concerns arising from omitted variables and reverse causality. The results support voluntary disclosure theory and suggest that the use of multiple CSR pronouncements improves market liquidity. These findings should be of interest to preparers and users of CSR reports, regulators, standard‐setters, and academics.