Herd behaviour in foreign exchange market

Anam Yasir (), Umar Safdar () and Yasir Javaid ()
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Anam Yasir: National College of Business Administration & Economics
Umar Safdar: National College of Business Administration & Economics
Yasir Javaid: ACCA_UK

Journal of Economic Structures, 2022, vol. 11, issue 1, 1-12

Abstract: Abstract This study examines the presence of herding behaviour in the forex market of Pakistan. By analysing the daily returns of the top six traded currencies from January 2015 to December 2019, the current research explores the behaviour of investors towards investment in currencies. Data is analysed using the model proposed by Chang et al. (2000). Results of estimation techniques provide evidence of herd behaviour among investors. Findings suggest that investors do not rely on their own decision-making; rather they follow the patterns of others. Furthermore, this imitating behaviour in same in up and down market events. Findings of this study provide significant insights for future researchers about decision-making of investors in forex market.

Keywords: Efficient market hypothesis; Behavioural finance; Herding; Asymmetric behaviour (search for similar items in EconPapers)
JEL-codes: G2 G4 (search for similar items in EconPapers)
Date: 2022
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DOI: 10.1186/s40008-022-00270-y

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