The Hindsight of ADR Listing – An Empirical Study on MA Activities for Acquirers Before-and-After ADR Listing

摘要

This paper finds that after ADRs were issued, the companies average abnormal return generated through merger activities increased significantly, and the average abnormal returns generated through cross-border merger activities increased from 2.3% to 2.9% compared to before the issuance of ADRs. This is because the issuance of ADRs not only strengthens the level of supervision, and reduces the directors' motives for their own self-interest during merger activities, it also reduces the costs caused by market segmentation and information asymmetry.