Determinants of choice of depositary receipt programs: an exploratory study

Sevic, Aleksandar and Krishnamurti, Chandrasekhar and Sevic, Zeljko (2010) Determinants of choice of depositary receipt programs: an exploratory study. Managerial Finance, 36 (12). pp. 990-1006. ISSN 0307-4358


Purpose – The purpose of this paper is to perform an exploratory study of depositary receipts (DRs). In addition to the geographical analysis it tests several hypothesis linked to various DRs’ issues.
Design/methodology/approach – Using the publicly available The Bank of New York’s (now The Bank of New York Mellon) database, descriptive statistics and logit analysis were applied.
Findings – It is evident that smaller firms issue DRs in lower level programs apparently due to the considerable cost barriers; firms with larger capital expenditure plans prefer to issue under level III or Rule 144A DR programs and higher quality firms, proxied by lower leverage, are likely to make higher level DR issues.
Research limitations/implications – The database is updated quite frequently and departures from enclosed findings are likely to occur in the years to come.
Practical implications – Management interested in issuing DRs may become acquainted with the pattern exercised by both small and large companies, or by companies with specific capital structures. In this manner the listing demonstrates less uncertainty as long as it is possible for managers to ascertain and compare own companies’ features.
Originality/value – The paper adds to the current literature regarding in-depth analysis of the DRs market.

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Item Type: Article (Commonwealth Reporting Category C)
Refereed: Yes
Item Status: Live Archive
Additional Information: Permanent restricted access to paper due to publisher copyright restrictions.
Faculty / Department / School: Historic - Faculty of Business - School of Accounting, Economics and Finance
Date Deposited: 13 Mar 2011 09:16
Last Modified: 18 Aug 2014 19:23
Uncontrolled Keywords: securities; international investments; United States of America; accounting standards; raising capital
Fields of Research : 15 Commerce, Management, Tourism and Services > 1502 Banking, Finance and Investment > 150201 Finance
22 Philosophy and Religious Studies > 2201 Applied Ethics > 220102 Business Ethics
14 Economics > 1402 Applied Economics > 140210 International Economics and International Finance
Socio-Economic Objective: E Expanding Knowledge > 97 Expanding Knowledge > 970115 Expanding Knowledge in Commerce, Management, Tourism and Services
Identification Number or DOI: 10.1108/03074351011088414

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