This paper investigates the impact of ADR listing on the trading volume and volatility of the domestic market. Existing theories indicate that trading shifts to a market with lower transaction costs, and the level of volatility is directly related to the level of trading activity. The analyses provide empirical evidence showing increase in both trading volume and price volatility in the domestic market after ADR listing. The increase in volatility is attributed to noise resulting from public information as opposed to from increased trading friction. This suggests improvement in liquidity following ADR listing. Comparison across country groups indicates marginally higher gain for emerging market stocks although the difference is not statistically significant. Auction type markets gain mo...
By the end of the nineteenth century, the banking systems of England and New England were very different. England possessed a small number of large-scale clearing banks that had established extensive branch networks and dominated the domestic market. In contrast, New England banking was characterized by a large number of small-scale institutions. Yet, a century earlier, there were striking similarities between the two systems. An analysis of their evolution over the course of the nineteenth century provides an international and comparative perspective on the continuing debate over banking institutions, lending patterns, and economic growth.
Previous study shows that equity structure and cultural difference are important factors that influence the performance of joint ventures (JVs). Based on the JVs contract database and Import/Export ranking database we collected, our analysis shows that the performance of monopoly controlled JVs is better that others under the domestic market situation. However, cultural difference is not the hindering factor to performance; in fact, heterogeneity has provided JVs better outcomes. Based on grouped data samples, it is believed that a higher ratio of Chinese equity in JVs will create better export performance. However, the relation between foreign equity and import orientation is not significant.
This article, based on research conducted in Jordan, discusses how favoritism affects the business climate. Jordan's business climate is mediocre in international and regional comparison, making it insufficient in light of the country's small domestic market. Businesspeople consider the complexity of administrative procedures to be a main problem for investors, along with a lack of fairness and predictability in administrative decisions. Favoritism, which is referred to as "using wasta," (connections) contributes substantially to both problems. Investors with good wasta can speed up procedures and get exclusive access to services and information. They can even influence legislation to their advantage. Perhaps even more problematic, entrepreneurs tend to invest their time and money in so...
I examine several possible explanations for why Infosys' Depositary Receipts (DRs) trade at significant premiums to the equivalent underlying domestic shares. I find that a limited supply of DRs and a downward-sloping demand curve, significant transaction costs associated with investing directly in the domestic market, and trend-chasing by smaller and potentially uninformed investors partly explain the DR premiums. I also examine the wealth effects of non-capital raising secondary depositary receipt offerings by Infosys Technologies and find significant wealth transfers from existing DR holders to selling domestic shareholders who are comprised significantly of Infosys' founders.
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