In this paper, we investigate how investment banks determine the gross spreads paid by American Depositary Receipts (ADRs) during 1981 to 2004. We then compare the gross spreads of ADRs to those of matching U.S. IPO and SEO firms to see if there are differences in gross spreads across types of firms. We conclude that ADR gross spreads can be explained by firm and offer characteristics, underpricing, gross spreads of matched U.S. IPOs and SEOs, the level of gross spreads in the domestic market, and whether the ADR firm has a prior listing. We argue that U.S. underwriters use available information in other markets when setting the gross spreads of ADRs (our reference hypothesis). This result has not been documented in prior research. We also find support for the negotiation hypothesis (integer offer price related to uncertainty) and the firm-level risk hypothesis that have been documented in earlier research.