Contrarian Returns Beyond the January Effect: Insight from GCC Emerging Market

Abdulrahman A. AlQuraishi

Review of Behavioral Economics, 2025, vol. 12, issue 2, 191-214

Abstract: This study analyzes the contrarian investment strategy in GCC’s emerging market, specifically focusing on Kuwait’s tax-free economy between January 2008 and December 2022. Through an empirical investigation, we examine the impact of the January effect on contrarian returns. Our findings show that the contrarian strategy yields positive, risk-adjusted, and statistically significant returns across various periods, which demonstrates its effectiveness, even when excluding the returns of January. Additionally, our analysis provides robust support for the overreaction hypothesis in the Kuwaiti market, showing that contrarian returns persist for up to 4 years after the formation period. This study makes a significant theoretical contribution by exploring the underlying drivers of contrarian returns in a tax-free context, challenging traditional assumptions about the sources of these returns, and providing insights into investors’ behavioral dynamics in an emerging market setting.

Date: 2025
References: Add references at CitEc
Citations:

Downloads: (external link)
http://dx.doi.org/10.1561/105.00000209 (application/xml)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:now:jnlrbe:105.00000209

Access Statistics for this article

More articles in Review of Behavioral Economics from now publishers
Bibliographic data for series maintained by Lucy Wiseman ().