American Depository Receipts: The Long-Term U.S. Investor Experience

25 Pages Posted: 15 Jan 2021

See all articles by Hendrik Bessembinder

Hendrik Bessembinder

W.P. Carey School of Business

Te-Feng Chen

Hong Kong Polytechnic University

Goeun Choi

Arizona State University (ASU) - Finance Department

K.C. John Wei

Hong Kong Polytechnic University

Multiple version iconThere are 2 versions of this paper

Date Written: January 8, 2021

Abstract

We study long-run outcomes to those who invested in non-U.S. stocks through American Depository Receipts (ADRs) between August 1954 and September 2020, with particular attention to ADRs associated with Chinese firms. Overall, ADRs improved their investors’ wealth by $1.03 trillion, as compared to a Treasury-bill benchmark. More than a third of this amount was attributable to ADRs associated with Chinese firms. A value-weighted portfolio of ADRs associated with Chinese firms earned 1.64% per month since the first Chinese ADR was created in 1993, as compared to 0.89% per month for the overall U.S. stock market over the same period. These data are relevant to current policy discussions focused on Chinese firms listed in the U.S.

Suggested Citation

Bessembinder, Hendrik (Hank) and Chen, Te-Feng and Choi, Goeun and Wei, Kuo-Chiang (John), American Depository Receipts: The Long-Term U.S. Investor Experience (January 8, 2021). Available at SSRN: https://ssrn.com/abstract=3762706 or http://dx.doi.org/10.2139/ssrn.3762706

Hendrik (Hank) Bessembinder (Contact Author)

W.P. Carey School of Business ( email )

W. P. Carey School of Business
PO Box 873906
Tempe, AZ 85287-3906
United States

HOME PAGE: http://https://wpcarey.asu.edu/people/profile/2717225

Te-Feng Chen

Hong Kong Polytechnic University ( email )

Hung Hom, Kowloon
Hong Kong
+852 3400 3856 (Phone)

Goeun Choi

Arizona State University (ASU) - Finance Department ( email )

W. P. Carey School of Business
PO Box 873906
Tempe, AZ 85287-3906
United States

Kuo-Chiang (John) Wei

Hong Kong Polytechnic University ( email )

11 Yuk Choi Rd
Hung Hom
Hong Kong

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