Do conventional and new energy stock markets herd differently? Evidence from China

Hui Hong, Lijun Jiang, Cheng Zhang and Zhonggang Yue

Research in International Business and Finance, 2024, vol. 67, issue PA

Abstract: This research investigates herding formation in a competing market setting of China’s conventional and new energy stock markets, making it the first of its kind to specify the difference in herding across these markets. Our results highlight investors’ tendency to herd in both types of energy markets with herding stronger for new energy stocks. Such a behavior tends to vary over time, displaying a dynamic pattern. Mixed evidence appears for the COVID-19 effect on herding: new energy stock investors choose to follow market consensus during the pandemic period, whereas their decision does not apply to conventional energy stock investors. Finally, information arrivals from the conventional energy market barely influence herding in the new energy market, while those from the new energy market help weaken herding in the conventional energy market. The evidence provides important implications for both energy stock investors and financial regulators.

Keywords: Herding behavior; Conventional energy market; New energy market; China (search for similar items in EconPapers)
JEL-codes: C32 G14 G15 (search for similar items in EconPapers)
Date: 2024
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:riibaf:v:67:y:2024:i:pa:s0275531923002465

DOI: 10.1016/j.ribaf.2023.102120

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