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EU–China Comprehensive Agreement on Investment: The impact of firm supply chains on firm value

Author

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  • Kees G. Koedijk
  • Xinrui Lin
  • Tong Qi
  • Wenhui Qiang

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.

Suggested Citation

  • Kees G. Koedijk & Xinrui Lin & Tong Qi & Wenhui Qiang, 2024. "EU–China Comprehensive Agreement on Investment: The impact of firm supply chains on firm value," Economic and Political Studies, Taylor & Francis Journals, vol. 12(4), pages 363-382, October.
    • Handle: RePEc:taf:repsxx:v:12:y:2024:i:4:p:363-382
    DOI: 10.1080/20954816.2024.2389660
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