Investor herd behaviour in Africa s emerging and frontier markets

Godfred Aawaar, Nicholas Addai Boamah and Joseph Oscar Akotey
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Godfred Aawaar: Department of Accounting and Finance, KNUST School of Business, KNUST, Kumasi, Ghana.
Nicholas Addai Boamah: Department of Accounting and Finance, KNUST School of Business, KNUST, Kumasi, Ghana.
Joseph Oscar Akotey: Department of Accounting and Finance, KNUST School of Business, KNUST, Kumasi, Ghana.

International Journal of Economics and Financial Issues, 2020, vol. 10, issue 6, 194-205

Abstract: Daily returns of 224 stocks traded on three distinctively classified markets (stand-alone, frontier, and emerging) within a developing continent context are used, employing the Chang, Chen and Khorana (2000) measure. We provide evidence of the presence of investor herding in Africa s emerging and frontier markets. Evidence of asymmetric herding activities during various market conditions is further provided. The paper also shows that the 2007-2009 global financial crisis did not intensify herding in African markets. The findings suggest that Africa s leading markets are still fairly inefficient, allowing for potential excess returns for investment strategies that seek to explore market anomalies.

Keywords: Behavioural finance; Investor behaviour; Herding; African markets; Asymmetric herding. (search for similar items in EconPapers)
JEL-codes: G01 G10 G14 G15 (search for similar items in EconPapers)
Date: 2020
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