Adrs, Analysts, and Accuracy: Does Cross Listing in the U.S. Improve a Firm's Information Environment and Increase Market Value?

Posted: 23 Dec 2002

See all articles by Mark H. Lang

Mark H. Lang

University of North Carolina at Chapel Hill

Karl V. Lins

University of Utah - Department of Finance

Darius P. Miller

Southern Methodist University (SMU) - Finance Department

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Abstract

This paper investigates the relation between cross listing in the U.S. and the information environment of non-U.S. firms. We find that firms that cross list on U.S. exchanges have greater analyst coverage and increased forecast accuracy relative to firms that are not cross listed. A time-series analysis shows that a change in analyst coverage and forecast accuracy occurs around cross listing. We also document that firms that have more analyst coverage and higher forecast accuracy have higher valuations. Further, the change in firm value around cross listing is correlated with changes in analyst following and forecast accuracy, suggesting that cross listing enhances firm value through its effect on the firm's information environment. Our findings support the hypothesis that cross-listed firms have better information environments, which are associated with higher market valuations.

Keywords: ADRs, analysts, accuracy, cross listing

JEL Classification: G15, G29, G32, M41

Suggested Citation

Lang, Mark H. and Lins, Karl V. and Miller, Darius P., Adrs, Analysts, and Accuracy: Does Cross Listing in the U.S. Improve a Firm's Information Environment and Increase Market Value?. Available at SSRN: https://ssrn.com/abstract=352101

Mark H. Lang

University of North Carolina at Chapel Hill ( email )

Kenan-Flagler Business School
McColl Building
Chapel Hill, NC 27599-3490
United States
919-962-1644 (Phone)
919-962-4727 (Fax)

Karl V. Lins

University of Utah - Department of Finance ( email )

David Eccles School of Business
Salt Lake City, UT 84112
United States
801-585-3171 (Phone)
801-581-7214 (Fax)

Darius P. Miller (Contact Author)

Southern Methodist University (SMU) - Finance Department ( email )

United States

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