Abstract
This research adopts an event study approach to investigate the impact of the European Union (EU)–China Comprehensive Agreement on Investment (CAI) negotiations on firm value. We emphasise two typical events during the process, i.e. the preliminary agreement and the suspension of the CAI, which result in completely distinct patterns of policy uncertainty for the EU and China. Using data from Chinese listed firms, we find that the Chinese stock market reacts positively to the preliminary agreement of the CAI but negatively to its suspension. A firm with global supply chains has better stock returns when exposed to the first event but no significant heterogeneity under the second event. We also find that these effects vary depending on the overseas experience of the CEO, firm ownership type, and whether the firm is in a high-tech industry.
Talk to us
Join us for a 30 min session where you can share your feedback and ask us any queries you have
Schedule a callDisclaimer: All third-party content on this website/platform is and will remain the property of their respective owners and is provided on "as is" basis without any warranties, express or implied. Use of third-party content does not indicate any affiliation, sponsorship with or endorsement by them. Any references to third-party content is to identify the corresponding services and shall be considered fair use under The CopyrightLaw.
