Minimum Wage and Shareholder Wealth: Evidence from Hong Kong

Evidence from existing studies on the impact of minimum wage on firm profitability and shareholder wealth are inconsistent. One of the explanations is the different natures of event studied. This paper is motivated to offer evidence for the relationship of minimum wage and shareholder wealth that is more comparable to the study on firm profitability. We examine the response in equity returns of the most affected industries to several events throughout the introduction of minimum wage in Hong Kong. Our results are mixed with a negative effect on shareholder wealth found in one out of five events.