Paper Title
The Effect of Trade and Financial Liberalization on Idiosyncratic Risk in Malaysia and China

Abstract
This study attempts to analyse the impact of trade and financial liberalization on idiosyncratic riskfor firms based on industry sectors. The results of study the have identified a number of salient features and characteristics of emerging economies such as China and Malaysia which are the subjects of this study. The results of the study indicates that Malaysian firms are more susceptible to liberalization activities as compared to firms in China. Furthermore, both trade and financial liberalization is more beneficialto Malaysian firms as compared to firms in China. The results also indicate financial liberalization does not provide as many benefits to most industry sectors in China. The empirical evidence also stipulates that even though Malaysian economic sectors are more heavily influenced by financial and trade liberalization, China’s economy could be positively impacted as a result of an increase in trade liberalization efforts. Keywords: Trade and Financial Liberalization, Idiosyncratic Risk, Industry Sectors JEL Classification: F36, G12, G15