Effect of Herding Biases on Investment Decisions at NSE in Kenya

Nicholas Kipkoech Koskei, Charles Tibbs and Reuben Rutto

Journal of Business and Social Review in Emerging Economies, 2025, vol. 11, issue 2, 189-204

Abstract: Purpose: To establish the effect of herding biases on investment decisions at NSE in Kenya.Design/Methodology/Approach: The research was conducted between May 2023 to June 2024 and covered 62 quoted companies at the NSE; the research took causal research design. This research design was appropriate since it facilitated data collection by different investors with the aim of establishing whether a phenomenon exists and its magnitude or established the relationship between variables as well as the cause and effect of variables. Quoted companies quoted in Nairobi security exchange were used as the units of study. And at present NSE has 62 listed companies. We used data collection schedule which gathered the data that would be required in the research. The study involved both the descriptive and inferential statistics data; it was coded and analyzed using both the qualitative and quantitative analysis method through strata.Findings: Panel data revealed a significant positive effect between herding bias and investment decision of NSE investors in Kenya (p0.0404<0.05). Therefore, the study rejected the null hypothesis.Implications/Originality/Value: The research suggests that average market performance ought to be the brand control regarding return dispersion to and productive herd behavior solutions. Having a centralized approach would suit investors better because a temporal herd behavior would be ideal than a permanent one.

Keywords: Nairobi Security Exchange; Investment decisions; Herding bias (search for similar items in EconPapers)
Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:src:jbsree:v:11:y:2025:i:2:p:189-204

DOI: 10.26710/jbsee.v11i2.3422

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