Abstract

The impact of issuing American Depository Receipts on the wealth of Latin American shareholders have rarely been discussed in the specialized literature. The Event Study methodology is used to analyze the reaction to Public Announcement of ADRs. Using several model specifications the results robustly indicate that prices incorporate a such announcement in a positive, statistically, and economically significant way with a cumulative average-abnormal return of 5% in three days and 9% for a window of twenty-one days.