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Cross-sectional variation in the long-run performance of capital-raising depositary receipts and their underlying stocks

journal contribution
posted on 2023-06-08, 11:46 authored by Surendranath Jory, Thanh N Ngo
In this paper, we investigate the cross-sectional variation in the post-issuance long-run performance of American depositary receipts (ADRs) and their underlying stocks. We focus on the factors that explain the cross-sectional variation in the returns. Our sample includes issues of ADRs by 109 non-U.S. companies from Asia, Africa, Europe and Latin America during the period 2000-2004. We find that, overall, ADR issues and their underlying stocks underperform market benchmarks. We also find that the degree to which the ADRs underperform depends on whether the underlying foreign company is undergoing privatization, the investor protection quality of the foreign country, the ADRs' offer size, and the listing market.

History

Publication status

  • Published

Journal

Global Business and Finance Review

ISSN

1088-6931

Publisher

College of Business, University of Southern Indiana

Issue

1

Volume

13

Page range

1-13

Department affiliated with

  • Business and Management Publications

Full text available

  • No

Peer reviewed?

  • Yes

Legacy Posted Date

2012-06-13

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