Depositary receipts and firm value: Evidence from Central Europe and Russia

This research indicates an average valuation premium of 27.3% in a sample of 43 cross-listed companies domiciled in Hungary, the Czech Republic, Poland and Russia relative to 123 companies from the region that choose not to cross list. After controlling for a host of country-specific micro- and macro-economic variables, the results reveal that firms that have less access to sound money in domestic markets and firms from countries with large government sectors are more likely to issue a depositary receipt. These companies also realize a higher market value, measured by Tobin's Q.