IDEAS home Printed from https://ideas.repec.org/a/mth/ajfa88/v2y2010i2p1-19.html
   My bibliography  Save this article

Do Institutional Investors Herd in Emerging Markets? Evidence from the Taiwan Stock Market

Author

Listed:
  • Jonchi Shyu
  • Hsin-Ming Sun

Abstract

This study employs daily trading data to examine the herding behavior of institutional investors in Taiwan’s stock market. Our results show evidence of herding for institutional investors; indeed, they would follow both other institutional trades and their own trades. We also find that institutional investors are not driven principally by impulse or instinct and that “herded into” stocks do not exhibit unusual return reversals. Moreover, the intensity of herding is negatively related to firm size, which suggests that institutional herding in Taiwan’s stock market is driven primarily by information cascades. Keywords- Institutional investor, Herding behavior, Information cascade, Emerging markets JEL Classifications- G11, G20, N25

Suggested Citation

  • Jonchi Shyu & Hsin-Ming Sun, 2010. "Do Institutional Investors Herd in Emerging Markets? Evidence from the Taiwan Stock Market," Asian Journal of Finance & Accounting, Macrothink Institute, vol. 2(2), pages 119-119, December.
    • Handle: RePEc:mth:ajfa88:v:2:y:2010:i:2:p:1-19
    as

    Download full text from publisher

    File URL: https://www.macrothink.org/journal/index.php/ajfa/article/download/456/812
    Download Restriction: no
    File URL: https://www.macrothink.org/journal/index.php/ajfa/article/view/456
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Luis Ferruz Agudo & J. L. Sarto & L. Vicente, 2008. "Herding behaviour in Spanish equity funds," Applied Economics Letters, Taylor & Francis Journals, vol. 15(7), pages 573-576.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Yi-Chang Chen & Hung-Che Wu & Yuanyuan Zhang & Shih-Ming Kuo, 2021. "A Transmission of Beta Herding during Subprime Crisis in Taiwan’s Market: DCC-MIDAS Approach," IJFS, MDPI, vol. 9(4), pages 1-16, December.
    2. Elsayed Elsiefy & Moustafa Ahmed AbdElaal, 2017. "Analyzing Foreign Investors Behavior in the Emerging Stock Market: Evidence from Qatar Stock Market," Accounting and Finance Research, Sciedu Press, vol. 6(4), pages 197-197, Novebmer.
    3. Zheng, Zhigang & Tang, Ke & Liu, Yaodong & Guo, Jie Michael, 2021. "Gender and herding," Journal of Empirical Finance, Elsevier, vol. 64(C), pages 379-400.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Pegah Dehghani & Ros Zam Zam Sapian, 2014. "Sectoral herding behavior in the aftermarket of Malaysian IPOs," Venture Capital, Taylor & Francis Journals, vol. 16(3), pages 227-246, July.
    2. Puput Tri Komalasari & Marwan Asri & Bernardinus M. Purwanto & Bowo Setiyono, 2022. "Herding behaviour in the capital market: What do we know and what is next?," Management Review Quarterly, Springer, vol. 72(3), pages 745-787, September.
    3. Laura Andreu & Cristina Ortiz & Jose Luis Sarto, 2009. "Herding behaviour in strategic asset allocations: new approaches on quantitative and intertemporal imitation," Applied Financial Economics, Taylor & Francis Journals, vol. 19(20), pages 1649-1659.
    4. Flora Muiño & Marco Trombetta, 2009. "Does graph disclosure bias reduce the cost of equity capital?," Accounting and Business Research, Taylor & Francis Journals, vol. 39(2), pages 83-102.
    5. Lu¨ªs Oliveira & Tom¨¢s Salen & Jos¨¦ Dias Curto & Nuno Ferreira, 2019. "Market Timing and Selectivity: An Empirical Investigation of European Mutual Fund Performance," International Journal of Economics and Finance, Canadian Center of Science and Education, vol. 11(2), pages 1-16, February.
    6. Carlos F. Alves & João Vaz Nunes & Ana Paula Serra, 2014. "Analysis of European Equity Funds Preferences for Stock Characteristics," FEP Working Papers 533, Universidade do Porto, Faculdade de Economia do Porto.
    7. Ashish Kumar Garg & Subrata Kumar Mitra & Dilip Kumar, 2016. "Do foreign institutional investors herd in emerging markets? A study of individual stocks," DECISION: Official Journal of the Indian Institute of Management Calcutta, Springer;Indian Institute of Management Calcutta, vol. 43(3), pages 281-300, September.
    8. Laura Andreu & Cristina Ortiz & José Luis Sarto, 2015. "Herding in Style Allocations," Journal of Business Economics and Management, Taylor & Francis Journals, vol. 16(4), pages 822-844, August.
    9. Hagerman, Amy D. & Jin, Yanhong H., 2009. "The Buzz In The Pits: Livestock Futures' Response To A Rumor Of Foreign Animal Disease," 2009 Annual Meeting, July 26-28, 2009, Milwaukee, Wisconsin 49493, Agricultural and Applied Economics Association.
    10. Kapil Choudhary & Parminder Singh & Amit Soni, 2022. "Relationship Between FIIs’ Herding and Returns in the Indian Equity Market: Further Empirical Evidence," Global Business Review, International Management Institute, vol. 23(1), pages 137-155, February.
    11. Laura Andreu & José L. Sarto & Pilar Gargallo & Manuel Salvador, 2020. "Leaders and followers in mutual funds: A dynamic Bayesian approach," Applied Stochastic Models in Business and Industry, John Wiley & Sons, vol. 36(4), pages 679-695, July.

    More about this item

    JEL classification:

    • R00 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General - - - General
    • Z0 - Other Special Topics - - General

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:mth:ajfa88:v:2:y:2010:i:2:p:1-19. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Technical Support Office (email available below). General contact details of provider: http://www.macrothink.org/journal/index.php/ajfa .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.