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

O'Connor, Thomas G. (2007) Is there a cross listing permium for non-exchange traded depositary receipts? UNSPECIFIED. (Unpublished)

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In this paper, I examine the valuation effects of trading in the U.S. as non-exchange issues i.e. Level 1 and 144 firms for non-U.S. firms. The study is motivated by two facts; first, while the number of new Level 2/3 issues has fallen 2001, Level 1 issues have remained an attractive listing option for non-U.S. firms. Second, while on theoretical grounds, firms from low-disclosure regimes have most to gain from exchange listing; these firms tend to list in the U.S. as non-exchange issues. Here, I examine whether the continuing attractiveness of, and the tendency of firms to choose a Level 1/144a listing is value enhancing. My results suggest that the tendency on the part of firms from low-disclosure regimes to choose non-exchange issues is justified. Relative to their high-disclosure peers, these firms tend to gain most from trading in the U.S. However, for Rule 144a issues, the valuation gains are short-lived.

Item Type: Other
Additional Information: Part of the Department of Economics Working Paper Series N/185/12/07
Keywords: Cross listing, Level 1, Rule 144a, Tobin’s q.
Academic Unit: Faculty of Social Sciences > Economics, Finance and Accounting
Item ID: 829
Depositing User: Ms Sandra Doherty
Date Deposited: 12 Dec 2007
Refereed: No

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