Does Herding Exist? Evidence from Pakistan9apos9s Stock Exchange

Samreen Fahim Babar, Syeda Faizaq Urooj and Khalid Usman
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Samreen Fahim Babar: Assistant Professor,
Syeda Faizaq Urooj: Assistant Professor,

Global Economics Review, 2016, vol. 1, issue 1, 13-23

Abstract: Herding transpires when an investor imitates the decision of other stockholders or shadow market consensus (Rizzi, 2008). The Chartered Financial Analyst Institute affirms “Herding Behavior Bias†as the principal presumption influencing the investor’s decision. (Kunte, S.2015). Herding behavior contradicts the validity of an Efficient Market Hypothesis (Famma and Franch, 1970). The investigation of herd behavior in the Pakistan stock market is indispensable as the inconsistent behavior of stockholders stems from the inefficient assets pricing and resource misallocation. The study’s result affirms the existence of herd behavior in the stock exchange of Pakistan and contradicts rational assets pricing model and stock price efficiency theory.

Keywords: Herding Behavior; Stock Exchange; Investment Decision; Efficient Market; Asset Pricing. (search for similar items in EconPapers)
Date: 2016
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Persistent link: https://EconPapers.repec.org/RePEc:aaw:journl:v:1:y:2016:i:1:p:13-23

DOI: 10.31703/ger.2016(I-I).02

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