{"id":382,"date":"2026-06-30T05:58:35","date_gmt":"2026-06-30T05:58:35","guid":{"rendered":"https:\/\/www.journals.utgjiu.ro\/JES\/?post_type=articol&#038;p=382"},"modified":"2026-06-30T05:58:35","modified_gmt":"2026-06-30T05:58:35","slug":"capital-controls-level-of-liquidity-and-stock-returns-in-malaysia","status":"publish","type":"articol","link":"https:\/\/www.journals.utgjiu.ro\/JES\/articol\/capital-controls-level-of-liquidity-and-stock-returns-in-malaysia\/","title":{"rendered":"CAPITAL CONTROLS, LEVEL OF LIQUIDITY AND STOCK RETURNS IN MALAYSIA"},"content":{"rendered":"<p>This paper examines whether the relationship between the level of liquidity and stock returns during this<br \/>\nperiod in Bursa Malaysia (KLSE) are affected by the implementation of capital controls by the Malaysian government<br \/>\nfollowing the 1997 Asian financial crisis. The turnover ratio is used as a measure of the level of liquidity, with the<br \/>\ncontrol variables being beta, size, book-to-market ratio, and momentum. The examination of the interactions between<br \/>\nbeta, size, book-to-market, momentum, and turnover ratio with capital controls demonstrated that the impact of size<br \/>\nbecame smaller, the impact of book-to-market became more positive, and the impact of the level of liquidity became<br \/>\nlarger after capital control implementation. Beta does not have a significant impact on returns, which remained<br \/>\nunchanged even after the inclusion of the capital controls interaction term. The impact of two out of the three<br \/>\nmomentum terms became more positive. The reliability of the results was confirmed and verified through several<br \/>\nrobustness checks. The impact of the turnover ratio on returns or the mediating effect of capital controls on the impact<br \/>\nof the turnover ratio on returns was not altered by the exclusion of the January data. The tests provide evidence of a<br \/>\nnonlinear relationship between the level of liquidity and stock returns even with the inclusion of the capital controls<br \/>\ninteraction terms. When the level of liquidity is high, its impact on returns becomes significantly greater. In addition,<br \/>\nthe study demonstrates that while a high level of liquidity may contribute favorably to stock returns, the variation in the<br \/>\nlevel of liquidity has a negative impact on returns, which becomes more negative following the implementation of<br \/>\ncapital controls.<\/p>\n","protected":false},"featured_media":0,"template":"","meta":{"site-sidebar-layout":"default","site-content-layout":"","ast-site-content-layout":"default","site-content-style":"default","site-sidebar-style":"default","ast-global-header-display":"","ast-banner-title-visibility":"","ast-main-header-display":"","ast-hfb-above-header-display":"","ast-hfb-below-header-display":"","ast-hfb-mobile-header-display":"","site-post-title":"","ast-breadcrumbs-content":"","ast-featured-img":"","footer-sml-layout":"","ast-disable-related-posts":"","theme-transparent-header-meta":"","adv-header-id-meta":"","stick-header-meta":"","header-above-stick-meta":"","header-main-stick-meta":"","header-below-stick-meta":"","astra-migrate-meta-layouts":"default","ast-page-background-enabled":"default","ast-page-background-meta":{"desktop":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"tablet":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"mobile":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""}},"ast-content-background-meta":{"desktop":{"background-color":"var(--ast-global-color-4)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"tablet":{"background-color":"var(--ast-global-color-4)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"mobile":{"background-color":"var(--ast-global-color-4)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""}}},"class_list":["post-382","articol","type-articol","status-publish","hentry"],"_links":{"self":[{"href":"https:\/\/www.journals.utgjiu.ro\/JES\/wp-json\/wp\/v2\/articol\/382","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.journals.utgjiu.ro\/JES\/wp-json\/wp\/v2\/articol"}],"about":[{"href":"https:\/\/www.journals.utgjiu.ro\/JES\/wp-json\/wp\/v2\/types\/articol"}],"wp:attachment":[{"href":"https:\/\/www.journals.utgjiu.ro\/JES\/wp-json\/wp\/v2\/media?parent=382"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}