Document Type

Article - post-print

Publication Date



This paper examines (i) whether the level of firms’ cash holdings differ depending on the strength of investor protection, (ii) whether excess cash holdings are valued more with better investor protection, and (iii) whether cross-listed firms that improve investor protection through “bonding” hold relatively more cash than non-cross-listed firms. We analyze 1405 ADR firms and their corresponding matched firms from 39 different countries and document that ADR firms have significantly higher cash holdings relative to their non-cross-listed peers, especially in recent years. The increase in cash holdings is much higher for emerging market firms because of their transition from particularly poor home country investor protection and accounting standards before cross-listing to much higher standards after cross-listing. In addition, firms with level III ADR listing, which represents the strongest investor protection, have higher cash holdings relative to other types of ADR firms.

Publisher Statement

This is an author-manuscript of an article accepted for publication in Journal of Banking & Finance following peer review. The version of record is available online at:

Recommended Citation

Huang, Ying, Elkinawy, Susan and Jain, Pankaj K. 2013. "Investor protection and cash holdings: Evidence from US cross-listing," Journal of Banking & Finance 37(3), 937-951.