The effects of market segmentation and investor recognition on asset prices¶
Foerster, S. R., & Karolyi, G. A. (1999). The effects of market segmentation and investor recognition on asset prices: Evidence from foreign stocks listing in the United States. Journal of Finance, 54(3), 981-1013.
Cited by¶
1 citation across 1 artifact.
Each citation links to the sentence it supports in the citing article.
Primes¶
- Arbitrage (Finance)
- Foerster and Karolyi (1999), studying non-U.S. firms cross-listing as ADRs, document persistent intraday and overnight basis gaps between home-market shares and U.S.-listed ADRs—gaps that arbitrageurs cannot fully close because cross-venue execution requires sequential trading across non-overlapping time zones, settlement systems, and currencies.
This sourceDocuments large abnormal returns around cross-listings of non-U.S. firms as U.S. ADRs (+19% in the year before listing, +1.2% in the listing week, −14% in the year after), evidence that market segmentation and limited investor recognition keep segmented venues from converging—so time-zone, settlement, and currency frictions prevent perfectly simultaneous cross-venue arbitrage.
- Foerster and Karolyi (1999), studying non-U.S. firms cross-listing as ADRs, document persistent intraday and overnight basis gaps between home-market shares and U.S.-listed ADRs—gaps that arbitrageurs cannot fully close because cross-venue execution requires sequential trading across non-overlapping time zones, settlement systems, and currencies.
Verification¶
This reference passed the adversarial substantiation pipeline: it was checked to exist and to support the claim it is attached to. See how references were verified.
Registry ID ref:ce6593a69b5a · see in the full table