Early Wealth Effects of Emerging and Developed ADRs: Does Issue Type or Timing Matter?

Abstract

This study provides excess performance analysis of the 193 emerging market and 169 developed market equities traded on the New York Stock Exchange as American Depositary Receipts (ADRs). The samples are broken down by type of issue (IPOs versus SEOs) and timing of the issue (listed in 1990s versus 2000s). With the emerging issues, SEOs tend to outperform IPOs in the short term, while the opposite is true for the developed sample. Also, for the emerging issues, SEOs did better in early trading in the 1990s, while IPOs did better in the 2000s. Once again, the opposite is true for the developed market ADR.