Bulk and block holders herding behaviour

Abstract

Purpose The purpose of this paper is to examine industry herding among the institutional investors and to find whether their herding behaviour is intentional or unintentional. Design/methodology/approach The study uses Lakonishok et al. (1992) model to examine the presence of industry herding behaviour among institutional investors. To determine whether the herding observed is intentional or unintentional, herding measure is regressed with volatility, volume, beta and return. The period of the study is from 1 April 2005-31 March 2015. Findings The findings of the study showed that though institutional investors have herding tendency towards most of the industries, in the overall period industry herding was not significant. The herding found in some industrial sectors was linked to economic performance of those sectors in India during the period of study and hence the herding was unintentional in nature. Research limitations/implications This is the first attempt to study industry herding among institutional investors and their intent in Indian market ever since the country opened its market to foreign investors in a big way. Present study is limited to the use of only bulk/block data instead of the entire trading data for the period. Originality/value This study is the first attempt to investigate industry herding behaviour of institutional investors in the market using their bulk and block trading data. The herding observed in well performing industries has been shown to be unintentional and hence rational. The results indicate that the entry of big institutional investors, including foreign institutions into the Indian market has not destabilised the market by irrational herding.

Effect of presidential elections on investor herding behaviour in African stock markets

“…Kabir (2017) opine that in periods of financial crisis, spurious herding of great intensity is experienced in the banking industry. The finding in the financial services sector of Ghana is line with prior studies in other contexts (Litmi, 2017; Ganesh et al. , 2018).…”

“…Ganesh et al. (2018) investigate sectoral herding in India with more emphasis on whether it is motivated by intent or otherwise.…”

“…The causes of herding are sector specific. Ganesh et al (2018) investigate sectoral herding in India with more emphasis on whether it is motivated by intent or otherwise. The study utilises bulk and block nifty 50 stock data from 2005 to 2015 and categorises them into sectors.…”

Herding and retail investors’ decisions: A review literature

“…The impact of herding on decision-making and its relationship with retail investors' decisions have been studied for developed and developing countries. Quite number of prior studies [54,56,58,61,[79][80][81][82] have investigated the impact of herding on individual investors in the developing countries and emerging market. In the Turkish market, global risk factors influence stock market and generate herding behavior among investors [83] .…”

Analisis Faktor Faktor Determinan Dan Perilaku Herding Di Pasar Saham

“…Berdasarkan analisis kami, perilaku herding terjadi hampir di seluruh belahan dunia. Mulai dari Benua Asia, perilaku herding terjadi di Vietnam (Vo & Phan, 2016, Pakistan (Shah, Shah, & Khan, 2017), India (Bhaduri & Mahapatra, 2013;Ganesh, Gopal, & Thiyagarajan, 2018), Cina (T. C. Chiang, Li, & Tan, 2010;Gong & Dai, 2017;Lan, 2014;Lao & Singh, 2011;Li, Liu, & Park, 2017;Yao, Ma, & He, 2014;Zheng, Li, & Chiang, 2017), Jepang (Cajueiro & Tabak, 2009;Zheng et al, 2017), Korea (Zheng et al, 2017), Hongkong (Zheng et al, 2017), Taiwan (W. T. Lin, Tsai, & Lung, 2013;Zheng et al, 2017) (Guney, Kallinterakis, & Komba, 2017). Lalu, Di Benua Eropa perilaku herding juga terjadi di Perancis (Khan, Hassairi, & VIVIANI, 2011;Litimi, 2017), Jerman (Khan et al, 2011), Italia (Khan et al, 2011), Inggris (Khan et al, 2011), Finlandia (Lindhe, 2012), Romania (Pop, 2013), Portugal (Leite, Machado-Santos, & Silva, 2018), Yunani (Messis & Zapranis, 2014), dan Rusia (Indārs, Savin, & Lublóy, 2019).…”