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Herd behaviour in foreign exchange market

Author

Listed:
  • Anam Yasir

    (National College of Business Administration & Economics)

  • Umar Safdar

    (National College of Business Administration & Economics)

  • Yasir Javaid

    (ACCA_UK)

Abstract

This study examines the presence of herding behaviour in the forex market of Pakistan. By analysing the daily returns of the top six traded currencies from January 2015 to December 2019, the current research explores the behaviour of investors towards investment in currencies. Data is analysed using the model proposed by Chang et al. (2000). Results of estimation techniques provide evidence of herd behaviour among investors. Findings suggest that investors do not rely on their own decision-making; rather they follow the patterns of others. Furthermore, this imitating behaviour in same in up and down market events. Findings of this study provide significant insights for future researchers about decision-making of investors in forex market.

Suggested Citation

  • Anam Yasir & Umar Safdar & Yasir Javaid, 2022. "Herd behaviour in foreign exchange market," Journal of Economic Structures, Springer;Pan-Pacific Association of Input-Output Studies (PAPAIOS), vol. 11(1), pages 1-12, December.
    • Handle: RePEc:spr:jecstr:v:11:y:2022:i:1:d:10.1186_s40008-022-00270-y
    DOI: 10.1186/s40008-022-00270-y
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    References listed on IDEAS

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    More about this item

    Keywords

    Efficient market hypothesis; Behavioural finance; Herding; Asymmetric behaviour;
    All these keywords.

    JEL classification:

    • G2 - Financial Economics - - Financial Institutions and Services
    • G4 - Financial Economics - - Behavioral Finance

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