The Impact of New Southbound Policy on Abnormal Return of Stock Price of Taiwan Companies : Evidence from Vietnam’s and China’s Concept Stocks

• Main Authors: Chu-Hung Liu, 劉柷宏
• Other Authors: Chin-Jung Luan
• Format: Others
• Published: 2017
• Online Access: http://ndltd.ncl.edu.tw/handle/5hftsj

碩士 === 國立東華大學 === 國際企業學系 === 105 === The purpose of the study is to investigate the impact of “New Southbound Policy” proposed by Taiwan’s President on the policy-related firms’ abnormal return. Since the focus of the policy is turning investment from China to the Southeastern Asian countries, and Vietnam plays an important role of crucial regional economic integration agreement in Asia-Pacific region, we collect the data from TEJ (Taiwan Electronic Journal Financial Databank) and sample firms related to the policy, including firms investing Vietnam, firms investing in China, and firms investing both in Vietnam in China. We employ event study method to test the hypotheses. The results show that the announcement of the New Southbound Policy has a positive impact on the abnormal return of Vietnam concept firms. However, we find that the announcement of the policy also has a positive impact on China concept firms. The Southbound Policy, proposed by new government of Taiwan, is to aim to diversify the investment of firms, rather than to over-dependent upon the bilateral trade between China and Taiwan. The findings can provide important managerial implications to the firms investing in China and southeastern Asian countries, and offer a fertile ground to the research of Vietnam where is the focus of the investment in the near future.