BibTeX
@MISC{Lee08adrtype,
author = {Hei Wai Lee and Magali Valero},
title = {ADR Type and Country Characteristics},
year = {2008}
}
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Abstract
Changes in analysts ’ coverage and recommendations on foreign firms following their cross-listing in the United States suggest improvements in their information environment. The improvement, however, is asymmetric depending on the degree of information disclosure requirements of the type of ADRs used in cross-listing, and on the level of information asymmetry of the foreign firm. While the visibility improvement is symmetric for exchange-listed ADRs, Level I and Rule 144A ADRs attract greater analyst coverage for those come from emerging markets or when there is capital raising accompanies the cross-listing. There is also a significant reduction in recommendation dispersion that is mainly driven by firms listed on the NYSE and NASDAQ. The improvement in the dispersion is stronger for exchange-listed ADRs that come from emerging markets, originating in countries with civil law tradition, and with higher accounting standards. On the other hand, cross-listing in the U.S. has no significant impact on the analysts ’ consensus recommendations on foreign firms. 3
Keyphrases
foreign firm adr type country characteristic analyst coverage exchange-listed adrs significant reduction recommendation dispersion civil law tradition accounting standard significant impact information asymmetry united state information environment information disclosure requirement visibility improvement adrs attract
