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ADRs, Analysts, and Accuracy: Does Cross Listing in the U.S. Improve a Firm's Information Environment and Increase Market Value?

39 Pages Posted: 26 Mar 2002  

Mark H. Lang

University of North Carolina at Chapel Hill

Karl V. Lins

University of Utah - Department of Finance

Darius P. Miller

Southern Methodist University (SMU) - Edwin L. Cox School of Business

Multiple version iconThere are 2 versions of this paper

Date Written: April 2002

Abstract

This paper investigates the relation between cross listing in the U.S., with its resulting commitment to increased disclosure, and the information environment of non-U.S. firms. We find that firms that cross-list on U.S. exchanges have greater analyst coverage and increased forecast accuracy relative to firms that are not cross listed. A time-series analysis shows that the change in analyst coverage and forecast accuracy occurs around cross listing. We also document that firms that have more analyst coverage and higher forecast accuracy have a higher valuation. Further, the change in firm value around cross listing is correlated with changes in the firm's information environment. Our findings support the hypothesis that cross-listed firms have better information environments, which are associated with higher market valuations.

Keywords: ADRs, analysts, accuracy, cross listing

JEL Classification: G15, G29, G32, M41

Suggested Citation

Lang, Mark H. and Lins, Karl V. and Miller, Darius P., ADRs, Analysts, and Accuracy: Does Cross Listing in the U.S. Improve a Firm's Information Environment and Increase Market Value? (April 2002). Available at SSRN: https://ssrn.com/abstract=304623 or http://dx.doi.org/10.2139/ssrn.304623

Mark H. Lang

University of North Carolina at Chapel Hill ( email )

Kenan-Flagler Business School
McColl Building
Chapel Hill, NC 27599-3490
United States
919-962-1644 (Phone)
919-962-4727 (Fax)

Karl V. Lins (Contact Author)

University of Utah - Department of Finance ( email )

David Eccles School of Business
Salt Lake City, UT 84112
United States
801-585-3171 (Phone)
801-581-7214 (Fax)

Darius P. Miller

Southern Methodist University (SMU) - Edwin L. Cox School of Business ( email )

P.O. Box 750333
Dallas, TX 75275-0333
United States

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