International Research Journal of Commerce , Arts and Science

 ( Online- ISSN 2319 - 9202 )     New DOI : 10.32804/CASIRJ

Impact Factor* - 6.2311


**Need Help in Content editing, Data Analysis.

Research Gateway

Adv For Editing Content

   No of Download : 107    Submit Your Rating     Cite This   Download        Certificate

HERDING BEHAVIOR IN FINANCIAL MARKET: CRITICAL LITERATURE REVIEW

    2 Author(s):  CA DEEPAK KATARIA , SHARAD CHOUDHARY

Vol -  6, Issue- 12 ,         Page(s) : 18 - 28  (2015 ) DOI : https://doi.org/10.32804/CASIRJ

Abstract

This study proposes detailed theoretical background and a comprehensive literature review on herding behavior in various financial markets. In recent years, there has been much interest in incorporating ideas from social sciences in the economic and finance research. Behavioral finance is the application of psychology to financial behaviour and herd behaviour is one of its most interesting concepts. Herding in financial markets can be defined as mutual imitation leading to a convergence of action. In the behavioral finance literature, herding is often used to describe the correlation in trades resulting from interactions between investors. This behavior is considered to be rational for less sophisticated investors, who attempt to mimic financial gurus or follow the activities of successful investors, since using their own information knowledge would incur a higher cost.

1. Caparrelli, F., A., D., & Cassuto, A. (2004). Herding in the Italian Stock Market: A case of Behavioral Finance. Journal of Behavioral Finance , 5,222-230.
2. Chang, E. C., Cheng, J. W., & Khorana, A. (2000). An Examination of Herd Behavior In Equity Markets: An International Perspective. Journal of Banking and Finance , 24(10),1651-1679.
3. Chen, G., Rui, O., & Xu, Y. (2003). When Will Investors Herd?--Evidence from the Chinese Stock Markets. Working Paper, University of Texas, Dallas .
4. Choe, H., Kho, B., & Stulz, R. (1999). Do foreign investors destabilize stock markets? The Korean experience in 1997 . Journal Financial Economics , 54,227-264.
5. Christie, W. G., & Huang, R. D. (1995). Following the pied piper: do individual returns herd around the market? Financial Analysts Journal , 51,31-37.
6. Crutchfield, R. (1955). Conformity and Character. American Psychologist , 5(10),195-198.
7. Demirer, R., & Kutan, A. (2006). Does herding behavior exist in Chinese stock markets? Journal of International Financial Markets, Institutions and Money , 16,123-142.
8. Hirshleifer, D., & Teoh, S. H. (2003). Herd Behaviour and Cascading in Capital Markets: a Review and Synthesis. European Financial Management , 9, 25–66.
9. Hwang, S., & Salmon, M. (2004). Market stress and Herding. Jornal of Empirical Finance , 11,585-616.
10. Kim, K., & Nofsinger, J. (2005). Institutional Herding, Business Groups and Economic Regimes: Evidence from Japan. Journal of Business , 78(1).
11. Kim, W., & Wei, S.-J. (2002). Foreign portfolio investors before and during a crisis. Journal of International Economics , 56(1),77-96.
12. Ko, K., Kim, K., & Cho, S. (2005). Characteristics and performance of institutional and foreign investors in Japanese and Korean stock markets. Journal of Japanese International Economies .
13. Lakonishok, J., Shleifer, A., & Vishny, R. W. (1992). The impact of institutional trading on Stock Prices. Journal Of Financial Economics , 32,23-43.
14. Lakonishok, J., Shleifer, A., & Vishny, R. W. (1992). The impact of institutional trading on Stock Prices. Journal of Financial Economics , 32,23-43.
15. Lakshman, M., Basu, S., & Vaidyanathan, R. (2011). Market Wide Herding and The Impact of Institutional Investorsin the Indian Capital Market. Working Paper 327, Indian Institute of Management, Banglore .
16. Manganaro, A. (2007). Herding Behavior In The Swedish Mutual Fund Industry. Stockholm School Of Economics Master Thesis In Finance .
17. Nofsinger, J. R., & Sias, R. W. (1999). Herding and Feedback Trading by Institutional and Individual Investors. Journal of Finance , 54(6),2263-2295.
18. Olsen, A. (1996). Implications of Herding Behavior for Earnings Estimation, Risk Assessment, and Stock Returns. Financial Analyst Journal , 52,37-41.
19. P., L., & H., S. (2011). Herding Behavior in the Chinese and Indian Stock Markets. Journal of Asian Economics , 22(6),495-528.
20. Scharfstein, D., & Stein, J. (1990). Herd Behaviour and Investment. The American Review , 80(3),465-479.
21. Shefrin, H. (2000). Beyond Greed and Fear : Understanding Behavioral Finance and. Oxford University Press.
22. Sias, R., Starks, L., & Titman, S. (2001). The Price Impact of Institutional Trading. Working Paper, SSRN id 283779 .
23. Tan, L., Chiang, T. C., Mason, J. R., & Nelling, E. (2008). Herding behavior in Chinese stock markets: An examination of A and B shares. Pacific-Basin Finance Journal , 16,61-77.

*Contents are provided by Authors of articles. Please contact us if you having any query.






Bank Details