HERDING BEHAVIOR IN FINANCIAL MARKET – SYSTEMATIC LITERATURE REVIEW
Keywords:
Herding Behavior, Investor Psychology, Systematic Literature Review
Abstract
The aim of this research is to present a comprehensive theoretical analysis and provide concrete empirical support pertaining to the phenomenon of herding behavior within financial markets. The current paper can be classified as a literature review, which employed data collection techniques through an extensive survey of existing literature. The body of knowledge accumulated over a span of more than twenty years, consisting of both empirical investigations and theoretical inquiries, has yielded significant insights into the intricate nature of investor herding behavior. However, it is important to acknowledge that the author possesses relatively limited knowledge regarding markets other than capital markets, thereby presenting a constraint in terms of exploring the complexities associated with shifting behavior patterns. Furthermore, the available evidence concerning the existence of following behavior is not particularly compelling. Consequently, this paper advocates for the development and application of an empirical methodology that can effectively address these aforementioned limitations and offer a comprehensive evaluation of herding behavior. Additionally, this study critically examines recent empirical findings in order to identify areas that remain unexplored and require further investigation in future research endeavors.
References
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Demirer, R. and Kutan, A.M. (2006), “Does herding behavior exist in Chinese stock markets?”, Journal of International Financial Markets, Institutions andMoney, Vol. 16 No. 2, pp. 123-142, doi: 10.1016/j. intfin.2005.01.002
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Dina Gabbori, Nader Virk, Nadeem Aftab, Basel Awartani, The impact of Islamic events on herding behaviour in Saudi Arabian equities market, 2019, International Journal of Finance and Economic.
Elisabete F. Simões Vieiraa,∗, Márcia S. Valente Pereira, Herding behaviour and sentiment: Evidence in a small Europeanmarket, 2013 ASEPUC. Publicado por Elsevier España, S.L.U. Todos los derechos reservados.
Firdaus, Muhammad Yahya, Ayati, Afifah & Aprilia, Puji. (2022), “The Effect Of Financial Literature, Income And Herding Bias On Investment Decisions (Study on Students of the Faculty of Economics and Business, Mercu Buana University, Jakarta)”, Vol, 6 p1
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Gabbori, Dina. Virk, Nader. Aftab, Nadeem.and Awartani, Basel. (2022), “The impact of Islamic events on herding behaviour in Saudi Arabian equities market”, International Journal of Finance and Economic, https://doi.org/10.1002/ijfe.2678
Garg, A. ve Gulati, R. (2013). Do investors herd in Indian market. Decision, 40(3), 181– 196.
Ghazali syamni. (2009), “Hubungan Perilaku Perdagangan Investor Dengan Volume Perdagangan di Bursa Efek Indonesia”, Jurnal Manajemen Teori dan Terapan | Tahun 2, No.1, April 2009
Gleasona, Kimberly C. Mathurb, Ike, Peterson, Mark A. (2004), “Analysis of intraday herding behavior among the sector ETFs”, Journal of Empirical Finance 11 (2004) 681–694
Gong, Weili, Li, Silin, & Yu, Hongxin. (2022), “Herding Behavior in China's Stock Market under the Background of Implementation of the SHKSC Policy”, Discrete Dynamics in Nature and Society, Vol. 2022, https://doi.org/10.1155/2022/7278023
Graham, J.R., 1999. Herding among investment newsletters: Theory and evidence. J. Finance 54, 237–268
Grinblatt, M., Titman, S. and Wermers, R. (1995), “Momentum investment strategies, portfolio performance, and herding: a study of mutual fund behavior”, The American Economic Review, Vol. 85 No. 5, pp. 1088-1105
Gul, F., & Khan, K. (2019). An empirical study of investors attitudinal factors influencing herd behavior, Evidence from Pakistan Stock Exchange. Abasyn Journal of Social Sciences, 12(1), 1-1
Güvercin, A.(2016). “SentimentalHerding: The Role of Regionaland Global Shocks in Egyptian and Saudi Stock Markets, Sosyoekonomi”,.24(27), 25-32.
H. Uchida, and R. Nakagawa. (2007), “Herd behavior in the Japanese loan market: Evidence”, J. Finan. Intermediation 16 (2007) 555–583
Hong, Harrison, Jeffrey D. Kudik and Amit Solomon, 2000, "Security Analysts' Career Concerns and Herding of Earnings Forecasts:' RAND Journal of Economics, Vol. 3 1 , No. 1 , pp. 1 2 1-44
Hwang, S., and M. Salmon, 2004, Market stress and herding, Journal of Empirical Finance 11 (4), pp. 585–616.
Ike Arisanti. (2020), “Herding Behaviour Around Fed Fund Rate Announcements in Southeast Asia”, Jurnal Reviu Akuntansi dan Keuangan, vol 10 no 1, p. 93-102
Imran Yousaf a, Larisa Yarovaya, Herding behavior in conventional cryptocurrency market, non-fungible tokens, and DeFi assets, 2022, Finance Research Letters 50 103299, Published by Elsevier Inc.
Kahneman, D. and Tversky, A. (1979), "Prospect Theory: An Analysis of Decision under Risk", Econometrica, Vol. 47 No. 2, pp. 263-291.
Kaminsky, G., Schmukler, S., 1999. What triggers market?: a chronicle of the Asian crisis. J. Int. Money Finance 18 (4), 537–560.Kapusuzoglu, A. (2011), "Herding in the Istanbul Stock Exchange (ISE): A case of behavioral finance", African Journal of Business Management, Vol. 5 No.27, pp. 11210-11218.
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Published
2024-04-01
How to Cite
Sibarani, B. (2024). HERDING BEHAVIOR IN FINANCIAL MARKET – SYSTEMATIC LITERATURE REVIEW. JRMSI - Jurnal Riset Manajemen Sains Indonesia, 15(01), 33-45. https://doi.org/10.21009/JRMSI.015.1.04
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