IDEAS home Printed from https://ideas.repec.org/a/mjr/journl/v60y2023i1p123-143.html
   My bibliography  Save this article

Does Local Risk Still Matter in the Highly Liberalised Emerging Market of Malaysia?

Author

Listed:
  • Yin Yin Koay

    (School of Management, Universiti Sains Malaysia)

  • Chee-Wooi Hooy

    (School of Management, Universiti Sains Malaysia)

Abstract

Since 2009, both foreign and local investors in the Malaysian equity market have faced a single set of rules, enjoyed equal access to the same set of financial instruments, and benefited from international levels of minority investor protection, thus fulfilling the conditions for full integration with the world market. Malaysia can be identified as a highly liberalised Asian emerging equity market that aligns with the definition of an “integrated market†in existing empirical studies. Using a sample dataset from 2009 to 2016, we test whether Malaysia, as a highly liberalised emerging equity market, is still subject to local market risk pricing, along with six other Asian emerging markets, including China, India, Indonesia, the Philippines, South Korea and Thailand. The results from our study show that both world and local market risk are still priced in Malaysia and other Asian emerging markets, leading to the conclusion that none of them are fully integrated into the world market. This suggests that there may be other implicit barriers affecting equity market integration in emerging markets.

Suggested Citation

  • Yin Yin Koay & Chee-Wooi Hooy, 2023. "Does Local Risk Still Matter in the Highly Liberalised Emerging Market of Malaysia?," Malaysian Journal of Economic Studies, Faculty of Business and Economics, University of Malaya & Malaysian Economic Association, vol. 60(1), pages 123-143, January.
    • Handle: RePEc:mjr:journl:v:60:y:2023:i:1:p:123-143
    DOI: 10.22452/MJES.vol60no1.7
    as

    Download full text from publisher

    To our knowledge, this item is not available for download. To find whether it is available, there are three options:
    1. Check below whether another version of this item is available online.
    2. Check on the provider's web page whether it is in fact available.
    3. Perform a search for a similarly titled item that would be available.

    More about this item

    Keywords

    Integration; Risk pricing; integration; liberalised; Asian emerging market;
    All these keywords.

    JEL classification:

    • F30 - International Economics - - International Finance - - - General
    • G12 - Financial Economics - - General Financial Markets - - - Asset Pricing; Trading Volume; Bond Interest Rates
    • 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
    • G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:mjr:journl:v:60:y:2023:i:1:p:123-143. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Malaysian Economic Association (email available below). General contact details of provider: https://edirc.repec.org/data/pemmmea.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.