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Herding behaviour in the Chinese and Indian stock markets

Author

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  • Lao, Paulo
  • Singh, Harminder

Abstract

The existence of herding behaviour challenges the validity of the “efficient market hypothesis”. This study examines herding behaviour in the Chinese and Indian stock markets; our findings suggest that herding behaviour exists in both. The level of herding depends on market conditions. In the Chinese market, herding behaviour is greater when the market is falling and the trading volume is high. On the other hand, in India the study finds that it occurs during up-swings in market conditions. Herding behaviour is more prevalent during large market movements in both markets. In relative terms, a lower prevalence of herding behaviour was detected in the Indian stock market.

Suggested Citation

  • Lao, Paulo & Singh, Harminder, 2011. "Herding behaviour in the Chinese and Indian stock markets," Journal of Asian Economics, Elsevier, vol. 22(6), pages 495-506.
  • Handle: RePEc:eee:asieco:v:22:y:2011:i:6:p:495-506
    DOI: 10.1016/j.asieco.2011.08.001
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    References listed on IDEAS

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    Citations

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    Cited by:

    1. Hsieh, Shu-Fan, 2013. "Individual and institutional herding and the impact on stock returns: Evidence from Taiwan stock market," International Review of Financial Analysis, Elsevier, vol. 29(C), pages 175-188.
    2. Litimi, Houda & BenSaïda, Ahmed & Bouraoui, Omar, 2016. "Herding and excessive risk in the American stock market: A sectoral analysis," Research in International Business and Finance, Elsevier, vol. 38(C), pages 6-21.
    3. repec:bla:manchs:v:85:y:2017:i:6:p:765-794 is not listed on IDEAS
    4. Juan Benjamín Duarte Duarte & Juan Manuel Mascareñas Pérez-Iñigo, 2014. "¿Han sido los mercados bursátiles eficientes informacionalmente?," REVISTA APUNTES DEL CENES, UNIVERSIDAD PEDAGOGICA Y TECNOLOGICA DE COLOMBIA, June.
    5. repec:eee:riibaf:v:42:y:2017:i:c:p:865-873 is not listed on IDEAS
    6. Juan Benjamín Duarte Duarte & Juan Manuel Mascare?nas Pérez-Iñigo, 2014. "Comprobación de la eficiencia débil en los principales mercados financieros latinoamericanos," ESTUDIOS GERENCIALES, UNIVERSIDAD ICESI, November.
    7. repec:eco:journ1:2017-02-85 is not listed on IDEAS
    8. repec:eee:ecmode:v:68:y:2018:i:c:p:318-328 is not listed on IDEAS
    9. Hilal Hümeyra Özsu, 2015. "Empirical Analysis of Herd Behavior in Borsa Istanbul," International Journal of Economic Sciences, International Institute of Social and Economic Sciences, vol. 4(4), pages 27-52, December.
    10. repec:eee:reveco:v:50:y:2017:i:c:p:85-97 is not listed on IDEAS
    11. repec:eee:riibaf:v:42:y:2017:i:c:p:496-508 is not listed on IDEAS
    12. Zhu, Huiming & Guo, Yawei & You, Wanhai & Xu, Yaqin, 2016. "The heterogeneity dependence between crude oil price changes and industry stock market returns in China: Evidence from a quantile regression approach," Energy Economics, Elsevier, vol. 55(C), pages 30-41.
    13. Zhu, Huiming & Huang, Hui & Peng, Cheng & Yang, Yan, 2016. "Extreme dependence between crude oil and stock markets in Asia-Pacific regions: Evidence from quantile regression," Economics Discussion Papers 2016-46, Kiel Institute for the World Economy (IfW).

    More about this item

    Keywords

    G1; Herding; Market efficiency;

    JEL classification:

    • G1 - Financial Economics - - General Financial Markets

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