Cross-Listing and Long-Term Performance of ADRs: Revisiting European Evidence

40 Pages Posted: 17 Dec 2007 Last revised: 10 Aug 2009

See all articles by Franck Bancel

Franck Bancel

European School of Management (ESCP) - (EAP)

Madhu Kalimipalli

Lazaridis School of Business and Economics, Wilfrid Laurier University

Usha R. Mittoo

University of Manitoba - Department of Accounting and Finance

Date Written: August 1, 2009

Abstract

In this paper, we examine several cross-listing theories employing a sample of over 250 European ADRs representing 19 countries during the 1970-2002 period. We find that, firstly, though both Level II and III listings underperform over the three years subsequent to the US listing, the determinants of long-term performance are significantly different for the non-IPO and IPO firms. Secondly, there is a strong support for investor recognition in the non-IPO sample, for window-of-opportunity in the IPO sample, and for bonding in both samples, but little support for the market segmentation hypothesis. Overall, our results support the notion that different cross-listing theories are complementary and not mutually exclusive, in explaining the long-term performance.

Keywords: Stock performance, Long-run performance, US listings, European ADRs, Capital raising ADRs, Initial Public offerings

JEL Classification: F30, G15, G30

Suggested Citation

Bancel, Franck and Kalimipalli, Madhu and Mittoo, Usha R., Cross-Listing and Long-Term Performance of ADRs: Revisiting European Evidence (August 1, 2009). Available at SSRN: https://ssrn.com/abstract=1075364 or http://dx.doi.org/10.2139/ssrn.1075364

Franck Bancel

European School of Management (ESCP) - (EAP) ( email )

79 avenue de Republique
75543 Paris, Cedex 11, 75011
France
+33 1 49 23 20 76 (Phone)
+33 1 49 23 20 80 (Fax)

Madhu Kalimipalli (Contact Author)

Lazaridis School of Business and Economics, Wilfrid Laurier University ( email )

Waterloo, Ontario N2L 3C5
Canada
519-884-0710 (Phone)

HOME PAGE: http://www.madhukalimipalli.com/

Usha R. Mittoo

University of Manitoba - Department of Accounting and Finance ( email )

Faculty of Management
Winnipeg, MB R3T 5V4
Canada

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