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Stock Market Liberalization Impact on Sectoral Stock Market Return in Malaysia

Author

Listed:
  • Subashini Maniam

    (Faculty of Economics and Management, Universiti Putra Malaysia, Malaysia.)

  • Chin Lee

    (Faculty of Economics and Management, Universiti Putra Malaysia, Malaysia.)

Abstract

The stock market liberalization policies announcement dates shows that the liberalization policies were implemented on specific sectors in Malaysia instead of the whole stock market in the country. Therefore, this paper analyses the impact of stock market liberalization on sectoral stock market return in Malaysia, in particular finance sector and service sector. Dynamic Fixed Effect (DFE) method was used to study the stock market liberalization impact on the stock market return while controlling the effects of stock market characteristics, which are stock market size, volatility and liquidity. The results indicate that, in the long run stock market liberalization has positive effect on stock market return only for the service sector, but no significant impact on finance sector’s stock return.

Suggested Citation

  • Subashini Maniam & Chin Lee, 2018. "Stock Market Liberalization Impact on Sectoral Stock Market Return in Malaysia," Capital Markets Review, Malaysian Finance Association, vol. 26(2), pages 21-31.
    • Handle: RePEc:mfa:journl:v:26:y:2018:i:2:p:21-31
    as

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    References listed on IDEAS

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    More about this item

    Keywords

    Stock market liberalization; sectoral stock market return; Bursa Malaysia; pooled mean group; dynamic fixed effect method.;
    All these keywords.

    JEL classification:

    • F30 - International Economics - - International Finance - - - General
    • F32 - International Economics - - International Finance - - - Current Account Adjustment; Short-term Capital Movements
    • G14 - Financial Economics - - General Financial Markets - - - Information and Market Efficiency; Event Studies; Insider Trading
    • G15 - Financial Economics - - General Financial Markets - - - International Financial Markets
    • G18 - Financial Economics - - General Financial Markets - - - Government Policy and Regulation
    • G28 - Financial Economics - - Financial Institutions and Services - - - Government Policy and Regulation

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