This study investigates whether high-quality corporate governance and better corporate social responsibility (CSR) performance help reduce information asymmetry in the Taiwan stock market. Additionally, the study focuses on examining that corporate governance has a moderating or substitute effect on the relationship between CSR performance and information asymmetry. Using the percentage bid-ask spread and market depth as proxies for information asymmetry, univariate and multivariate regression results show that high-quality corporate governance and better CSR performance reduce information asymmetry. Importantly, the study also finds that the better corporate governance quality is, the stronger the negative relationship between CSR performance and information asymmetry. That is, corporate governance has a moderating effect on this relationship. Robust results again confirm that both corporate governance and CSR performance play a significant role in reducing information asymmetry.
corporate governance, CSR performance, information asymmetry, moderating effect, endogeneity