This study uses the event study approach to analyze the influence of China-South Korea Free Trade Agreement on the abnormal returns for various industries in Taiwan because of potential menace on Taiwanese trades and the development of industry. The empirical results show that China-South Korea FTA had caused the negative and significant abnormal returns on those industries including plastic cement, chemistry, textile and TFT-LCD panel but it created less influences on machine tool industry. Moreover, our finding exhibits that abnormal returns on different industry may have over reaction or under reaction to China-South Korea Free Trade Agreement.
