Going global: evidence from India

Roberta Adami, Sudha Mathew, Prem Puwanenthiren and Sheeja Sivaprasad

International Journal of Banking, Accounting and Finance, 2023, vol. 13, issue 4, 464-486

Abstract: American depository receipts (ADRs) and global depository receipts (GDRs) remain one of the predominant routes used by firms in emerging economies to list overseas. However, the aftermarket performance of ADR/ GDR issuances is not widely researched amongst emerging economies. Using an Indian sample of ADR and GDR issues, we analyse the short- and long-term performance of these firms. We adopt an event study methodology to assess the short-term performance and Lyon et al.'s (1999) approach to examine the long-term performance. We also examine the changes in firms' operating performance following ADR/GDR issuances. The results show that the short-term buy and hold abnormal returns for ADRs are relatively better than GDRs and in the long run yield positive abnormal returns. These firms also have better operating performance post their overseas issuance in the American stock markets and finally the results also show that ADR issues is a key driver in firm performance.

Keywords: American depositary receipts; global depositary receipts; GDRs; firm performance; operational characteristics; India. (search for similar items in EconPapers)
Date: 2023
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