Is there a cross listing premium for non-exchange traded depositary receipts?

Thomas O'Connor ()

Economics Department Working Paper Series from Department of Economics, National University of Ireland - Maynooth

Abstract: In this paper, I study the valuation effects of cross listing in the U.S. for a panel of emerging market firms over the period from 1990 to 2003. In line with Kristian-Hope et al. (2007), I find that only those firms from high disclosure regimes gain from Level 2/3 listing in the U.S. The gains are not immediate, but materialize once the firm has listed in the U.S. for at least five years. I also document long-term, but not immediate valuation gains for Level 1 over-the-counter issues. In contrast to Level 2/3 issues, the gains are concentrated amongst firms from low-disclosure regimes. I find no positive valuation effects for Rule 144a private placements. The results suggest that the decision on the part of the majority of firms from low-disclosure regimes not to list as exchange traded depositary receipts is warranted.

Keywords: Cross listing; corporate valuation; emerging markets. (search for similar items in EconPapers)
JEL-codes: G15 G34 G35 (search for similar items in EconPapers)
Pages: 24
Date: 2007
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