THE EFFECTS OF AMERICAN DEPOSITARY RECEIPT ANNOUNCEMENT ON THE UNDERLYING SHARE PRICE OF EMERGING ASIAN CORPORATIONS
Open Access
Author:
Lipchak, Elana
Area of Honors:
Finance
Degree:
Bachelor of Science
Document Type:
Thesis
Thesis Supervisors:
Laura B Field, Thesis Supervisor Laura B Field, Thesis Supervisor James Alan Miles, Thesis Honors Advisor
Keywords:
ADR emerging markets corporate governance asia
Abstract:
The purpose of the following study is to investigate the effect the announcement of an American Depositary Receipt (ADR) program has on the price of the underlying shares of an Emerging Asian corporation. The paper includes a background on emerging market structure, in particular, Emerging Asian corporate governance practices; a description of ADR programs, specifically their structure and the possible positive and negative effects associated with sponsorship; and an analysis of the data collected. For the purpose of the study, ADRs were taken from the JP Morgan’s Depositary Receipt Universe and narrowed based on level and country. Announcement date was found using the LexisNexis online database, and average abnormal returns and cumulative abnormal returns were calculated from the narrowed data pool. Overall, the announcement of an ADR program negatively affected the underlying share price.
