Valuation effect of capital account liberalization: Evidence from the Chinese stock market

Haoyuan Ding, Yuying Jin*, Kees G. Koedijk, Yunjin Wang

*Corresponding author for this work

Research output: Contribution to JournalArticleAcademicpeer-review


This paper examines the valuation effect of capital account liberalization. Using an event study approach and the policy announcement for RMB Qualified Foreign Institutional Investors (short for RQFII) as the event date, we find that overall, the stock market responded positively to the capital account liberalization announcement. In addition, we provide some heterogeneity that firms with more stringent financing constraints earn higher returns than their counterparts. Finally, existing local institutions play an important role in determining announcement returns.

Original languageEnglish
Article number102208
Pages (from-to)1-8
Number of pages8
JournalJournal of International Money and Finance
Early online date12 May 2020
Publication statusPublished - Oct 2020


  • Capital account liberalization
  • China
  • Financing constraints
  • Market response

Cite this