Benefits of Compliance with Securities Listing Standards: Evidence From the Depository Receipt Market
IMF Working Papers, May 1, 2001
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- Benefits of Compliance with Securities Listing Standards: Evidence From the Depository Receipt Market
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Bibliographic details
- Authors: Abdourahmane Sarr
- Published: May 1, 2001
- Series: IMF Working Papers
- DOI: https://doi.org/10.5089/9781451850208.001
Key findings
- The paper finds that costs of implementing stringent securities listing standards may exceed benefits.
- Depository receipts, a growing source of international equity financing, differ in types by the reporting and disclosure standards issuing firms are required to meet.
- For lower levels of compliance, results show that factors associated with the stage of economic development of the issuing firm's country account for the lower levels of capital raised.
- Incurring reporting costs to comply with higher standards may thus be inefficient for some firms.
- In contrast, firms choosing to meet higher reporting and disclosure standards do so because the information revealed would have a positive effect on capital raised.
Analysis and interpretation
- The analysis distinguishes issuing firms by the reporting and disclosure standards required under different types of depository receipt programs.
- Lower compliance levels are linked to country-development factors that help explain lower capital raised, suggesting that mandatory higher reporting may not always be welfare-improving.
- Firms that voluntarily meet higher standards appear to self-select when the marginal benefits in terms of additional capital outweigh the reporting costs.
Policy implications and recommendations
- Policy makers should weigh the private costs of implementing stringent listing standards against the potential benefits in capital access, particularly for firms from less-developed countries.
- Uniform imposition of higher reporting and disclosure standards could be inefficient where country-development factors drive limited capital raising.
- Allowing firms to self-select into higher reporting regimes may lead to more efficient outcomes because firms that expect positive capital gains will opt in.
Publication and metadata
- Author: Abdourahmane Sarr
- Publication date: May 1, 2001
- Series: Working Paper No. 2001/079
- Issue: 079
- Volume: 2001
- Pages: 19
- DOI: https://doi.org/10.5089/9781451850208.001
- Stock No: WPIEA0792001
- ISBN: 9781451850208
- ISSN: 1018-5941
- Subjects: Accounting standards, Financial institutions, Financial statements, Public financial management (PFM), Securities, Stocks
- Keywords: Accounting standards, ADR program, company securities, company's share, country firm, Europe, Financial statements, firm, firm specific, foreign equity investment, investor, issuing firm, publicly traded equity, regression analysis, Securities, Standards implementation, Stocks, WP
Source: Abdourahmane Sarr, "Benefits of Compliance with Securities Listing Standards: Evidence From the Depository Receipt Market", IMF Working Papers 2001, 079 (2001), accessed 9/17/2026, https://doi.org/10.5089/9781451850208.001