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Institutional Herding, Business Groups, and Economic Regimes: Evidence from Japan

Author

Listed:
  • Kenneth A. Kim

    (State University of New York at Buffalo)

  • John R. Nofsinger

    (Washington State University)

Abstract

We study institutional herding in Japan. Japanese firms are primarily owned by financial institutions and other corporations, they may belong to a business group (the keiretsu), and they have experienced several distinct economic regimes in its recent past. Overall, we find herding in Japan occurs on a lower level than in the United States but with a large impact on price movements. The price impact is even greater for keiretsu-affiliated firms. We also find the effects and behavior of institutional herding depends on the economic condition and the regulatory environment.

Suggested Citation

  • Kenneth A. Kim & John R. Nofsinger, 2005. "Institutional Herding, Business Groups, and Economic Regimes: Evidence from Japan," The Journal of Business, University of Chicago Press, vol. 78(1), pages 213-242, January.
    • Handle: RePEc:ucp:jnlbus:v:78:y:2005:i:1:p:213-242
    DOI: 10.1086/426524
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