Хураангуй:
On May 17, 2012, the Mongolian government approved Strategic Entities Foreign Investment Law of Mongolia (SEFILM). The law requires a number of the government’s approvals for foreign investments and transactions in entities operating in sectors with strategic importance. Some critics argued that SEFILM negatively affected Mongolia’s investment climate. This study investigates the effects of this legislation act on the equity
performance of mining companies with significant Mongolian assets. Any significant negative market reaction to the actual passage of the law is not found. When market-adjusted event study approach on the basis of asset pricing models is employed, the results suggest that news about the draft SEFILM was quickly reflected in prices of mining equities. After employing a MVRM framework, this study’s findings support that the passage of SEFILM did not equally affect mining equities.
JEL Classification: K22; F21; L78
Keywords: Emerging markets; Event studies; FDI; Mongolia
