Abstract

GONZALEZ, Maximiliano; GUZMAN, Alexander  and  TRUJILLO, María Andrea. Colombian ADRs: Why so few?. Innovar [online]. 2011, vol.21, n.42, pp.69-88. ISSN 0121-5051.

We address the question of why Colombian companies have had such a limited presence in the American Depositary Receipts (ADRs) market. Traditional explanations state that weak investor protection and the degree of economic and financial development in Colombia increase the cost of entry in the ADR market. However, in the case of Colombia these explanations do not suffice because in these respects Colombia is no different from other Latin American countries. Using a theoretical model, we show that additional factors such as drug trafficking and armed conflict better explain why Colombian firms have moved away from the ADRs market.

Keywords : Corporate governance; ADRs; economic and financial development; internal conflict.

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