EconPapers    
Economics at your fingertips  
 

HERD BEHAVIOR IN THE JAPANESE LOAN MARKET: EVIDENCE FROM BANK PANEL DATA

Ryuichi Nakagawa () and Hirofumi Uchida

No 737, Econometric Society 2004 Far Eastern Meetings from Econometric Society

Abstract: This paper investigates whether Japanese banks had been following herd behavior in the domestic loan market from 1975 through 2002. Applying the technique developed by Lakonishok, Shleifer, and Vishny (LSV) (1992, J. of Fin. Econ.) to the data of loans outstanding to different types of borrowers, we obtain evidence indicative of the existence of herding. Consistent herding during the entire sample period is observed among regional banks, whereas city banks had been following a cyclical herd behavior with one peak around the bubble period in the late 1980s. Even after adjusting for herding resulting from rational or institutional factors, we still observe herding for regional banks in the entire period, whereas herding only in the bubble period remains for city banks. The results would indicate that regional banks had been consistently following irrational herd behavior, while city banks were frantic enough to herd only in the bubble period in the late 1980s

Keywords: herd behavior; LSV herding measure; adjusted herding measure; banks; loan market; Japan (search for similar items in EconPapers)
JEL-codes: C12 G14 G23 (search for similar items in EconPapers)
Date: 2004-08-11
References: Add references at CitEc
Citations: Track citations by RSS feed

Downloads: (external link)
http://homepage3.nifty.com/hu/herd.pdf main text (application/pdf)
Our link check indicates that this URL is bad, the error code is: 500 Can't connect to homepage3.nifty.com:80 (No such host is known. )

Related works:
Journal Article: Herd behavior in the Japanese loan market: Evidence from bank panel data (2007) Downloads
Working Paper: Herd Behavior in the Japanese Loan Market: Evidence from Bank Panel Data (2004) Downloads
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:ecm:feam04:737

Access Statistics for this paper

More papers in Econometric Society 2004 Far Eastern Meetings from Econometric Society Contact information at EDIRC.
Bibliographic data for series maintained by Christopher F. Baum ().

 
Page updated 2020-03-29
Handle: RePEc:ecm:feam04:737