Discussion on Factors Potentially Triggering Herding Behavior among Chinese Investors: A Case Study of the Ground Weaponry II Sector in the A-Share Market

Haoran Chen ()
Additional contact information
Haoran Chen: University of Calgary, Schulich School of Engineering

A chapter in Proceedings of the 2026 11th International Conference on Financial Innovation and Economic Development (ICFIED 2026), 2026, pp 145-154 from Springer

Abstract: Abstract Unlike theoretical research, empirical studies on herding behavior and its triggers in various contexts are relatively rare. This study aims to fill this gap by investigating the irrational herding effect and its contributing factors within the Ground Weaponry II sector (sector code: GWII) of China’s A-share market in 2025. In June, this sector showed significant volatility, partly due to major policy announcements and increased speculative trading. Its share price rose from 2,951.33 yuan on June 3 to 5,735.31 yuan by August 13, representing a rapid increase. This study applied the Cross-Sectional Absolute Deviation (CSAD) model and the Cross-Sectional Standard Deviation (CSSD) model, to examine herding behavior in China’s Ground Weaponry II sector from June 2025. Data on daily stock prices were sourced from the Tongdaxin database and analyzed using Python 3.10 (sklearn library). A nonlinear regression was conducted (a=0.05). Results indicate the emergence of significant herding, likely triggered by government-led restructuring of military enterprises. Individual investors over-interpreted the policy, becoming overly optimistic and engaging in mimicry-driven investment.

Keywords: Herding Behaviour; Chinese A-share Stock Market; Ground Weaponry II Sector (650300) (search for similar items in EconPapers)
Date: 2026
References: Add references at CitEc
Citations:

There are no downloads for this item, see the EconPapers FAQ for hints about obtaining it.

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:spr:advbcp:978-94-6239-642-5_16

Ordering information: This item can be ordered from
http://www.springer.com/9789462396425

DOI: 10.2991/978-94-6239-642-5_16

Access Statistics for this chapter

More chapters in Advances in Economics, Business and Management Research from Springer
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().