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Investor herd behaviour in Africa s emerging and frontier markets

Author

Listed:
  • Godfred Aawaar

    (Department of Accounting and Finance, KNUST School of Business, KNUST, Kumasi, Ghana.)

  • Nicholas Addai Boamah

    (Department of Accounting and Finance, KNUST School of Business, KNUST, Kumasi, Ghana.)

  • Joseph Oscar Akotey

    (Department of Accounting and Finance, KNUST School of Business, KNUST, Kumasi, Ghana.)

Abstract

Daily returns of 224 stocks traded on three distinctively classified markets (stand-alone, frontier, and emerging) within a developing continent context are used, employing the Chang, Chen and Khorana (2000) measure. We provide evidence of the presence of investor herding in Africa s emerging and frontier markets. Evidence of asymmetric herding activities during various market conditions is further provided. The paper also shows that the 2007-2009 global financial crisis did not intensify herding in African markets. The findings suggest that Africa s leading markets are still fairly inefficient, allowing for potential excess returns for investment strategies that seek to explore market anomalies.

Suggested Citation

  • Godfred Aawaar & Nicholas Addai Boamah & Joseph Oscar Akotey, 2020. "Investor herd behaviour in Africa s emerging and frontier markets," International Journal of Economics and Financial Issues, Econjournals, vol. 10(6), pages 194-205.
    • Handle: RePEc:eco:journ1:2020-06-23
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    References listed on IDEAS

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    More about this item

    Keywords

    Behavioural finance; Investor behaviour; Herding; African markets; Asymmetric herding.;
    All these keywords.

    JEL classification:

    • G01 - Financial Economics - - General - - - Financial Crises
    • G10 - Financial Economics - - General Financial Markets - - - General (includes Measurement and Data)
    • G14 - Financial Economics - - General Financial Markets - - - Information and Market Efficiency; Event Studies; Insider Trading
    • G15 - Financial Economics - - General Financial Markets - - - International Financial Markets

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