March 11, 2008
Narjess Boubakri, Associate Professor in the Department of Finance, Jean-Claude Cosset, Full Professor in the Department of International Business, and Anis Samet, PhD student in Administration, shared the award for the Best Paper in International Finance at the Annual Conference of the Midwest Finance Association, held in San Antonio, Texas in late February. They received the distinction, sponsored by Wharton Research Data Services (WRDS), for their paper entitled The Choice of American Depositary Receipts (ADRs).
The primary goal of the winning paper, inspired by the first draft of Anis Samet’s PhD thesis, was to study the determinants in a firm’s decision to issue one of the American Depositary Receipt (ADR) programs (Level I, Level II, Level III, Rule 144A). The authors show that the firm’s attributes (its size, income, asset growth, leverage, privatization, ownership structure and country of origin) and the institutional variables in the country of origin (accounting rating and legal protection of minority shareholders) shape the choice.
The second objective of the paper was to examine issuing activity and the determinants of the choice of ADR before and after the enactment of the Sarbanes-Oxley (SOX) Act. The authors found that post-SOX, firms from emerging markets and from countries with weak legal protection of minority shareholders reallocated their choices among the various ADR programs.
The Midwest Finance Association (MFA), founded in 1951, brings together academics and practitioners with an interest in financial management and financial theory. The MFA Annual Conference in 2008 was attended by researchers and practitioners from over 40 countries.