ANA CRISTINA SILVA (Instituto de Empresa) GONZALO CHAVEZ () (Instituto de Empresa)
Abstract
(WP 06/04 Clave pdf) We compare trading costs between local stocks and their corresponding NYSE ADRs for Argentina, Brazil, Chile and Mexico.Results show that local stocks trading in Mexico and Chile exhibit higher costs than their ADRS,while Brazilian local stocks cost less. Argentina presents no significant differences. When we control for stock characteristics, the previous difference disappears for Brazilian and Chilean securities,while it is accentuated for Mexico. Local Mexican stocks are almost 3% of value traded more costly than their corresponding ADRs.Thus,Mexico presents cost barriers that inhibit the implementation of arbitrage transactions that facilitate stock price alignment.
Download Info
To download:
If you experience problems downloading a file, check if you have the
proper application to
view it first. Information about this may be contained
in the File-Format links below. In case of further problems read
the IDEAS help
page. Note that these files are not on the IDEAS
site. Please be patient as the files may be large.
Publisher Info
Paper provided by Instituto de Empresa, Area of Economic Environment in its series Working Papers Economia with number
wp04-06.