This paper investigates how liquidity factors impact on corporate credit spreads since global financial crisis. Empirical data for analysis was collected from the Barclays Global Corporate Bond Index among the Barclays Global Aggregate Bond Index provided by Bloomberg, and the Corporate Bond Option Adjusted Spread (OAS) was used instead of the Credit Default Swap (CDS) spread. Panel regression analysis with indexed bonds which experienced credit downgrades during 2008-2020 shows that corporate bond’s liquidity level measured by bid-offer spreads significantly impact to its credit spreads in negative direction since the crisis. This reflects the fact that market participants require less liquidity premium for risky bonds whose liquidity level are robust(tighter bid-offer spreads). Furthermore, our empirical test by the phase of business cycle indicates that the liquidity factor’s impact on corporate bond spreads reveals to be more significant during the times of economic downturns than boom. This implies that the liquidity premium tend to rise during economic recession when market players demand higher liquidity premium in compensation for the increased default probability in the whole economy. These analytical results suggest that we need to put more weights on liquidity level in terms of market-microstructure perspective when interpreting the corporate credit spreads. And the corporate and investors need to be more focused on the liquidity conditions during economic downturns when liquidity factor’s impact on credit spreads becomes more appealing.