The Geography and Determinants of ADR Holdings

We analyze institutional ownership in listed ADRs over the last two decades and investigate new determinants of institutional ownership in these ADRs. Using a unique dataset, we find that institutional investors invest more in ADRs without underlying stocks listed in the home market (i.e., single ADRs). We also document that institutional investors invest less in ADRs whose underlying stocks attract more foreign investors, and invest more in ADRs with more concentrated institutional ownership structure. Our results are statistically and economically meaningful and are robust to a battery of sensitivity checks