Raising Companies' Profile with Corporate Social Performance: Variation in Investor recognition and Liquidity Linked to Vigeo CSP Rating Disclosures


  • Bertrand Philippe
  • Guyot Alexis
  • Lapointe Vincent


  • Corporate Social Performance
  • Corporate Social Responsibility
  • Liquidity
  • Investor Base
  • Cost of Equity Capital

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This paper examines whether the initiation of Vigeo Corporate Social Performance (CSP) rating impacts company profiles. Using a sample of European listed firms, we confirm that there is a positive and significant relationship between CSP rating and a firm's liquidity and investor base. Consistent with the neglected stock effect, this relationship is sensitive to firm size. Our results have important implications for practitioners. Firstly, investment in Corporate Social Responsibility (CSR) could represent an alternative method of improving a company's stock market quality alongside liquidity provider contracting or market listing transfer. Secondly, when a firm's board investigates the opportunity to invest in CSR, it should consider the benefits of lowering the company's cost of capital through the aforementioned effects. Finally, from an asset manager's perspective, any change in CSP should be taken into account, as it can affect company valuation and therefore portfolio performance.

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