Study of the Link Between Companies' Characteristics and Issuance of Sponsored Depositary Receipts

In this study I attempt to link issuance of depositary receipts to companies’ characteristics, such as size, stock market valuation, risk, innovativeness, profitability and growth rate. I discover the following regularities in the data on Russian companies: 1) larger companies issue depositary receipts more often; 2) the issuance of depositary receipts positively influences the assets in the short run 3) higher market cap multiples are positively associated with the propensity to launch a depositary receipts program; 4) P/E and P/BV ratios fall in the year when DRs are issued; 5) historical growth rates positively influence the probability to issue depositary receipts; 6) growth rates increase in the year after the issuance; 7) the share of intangible assets in total assets and R&D expense expressed as a percentage of revenue do not influence the probability of a DR issuance in a statistically significant way. These results may be used to predict actions and performance of companies.