AI Article Synopsis

  • The study analyzes herding behavior in eight major Asian stock markets before, during, and after the Covid-19 pandemic, using stock return data from January 2018 to July 2022.
  • Robust evidence indicates herding tendencies particularly in Vietnam, Indonesia, India, South Korea, and Singapore during bullish periods, with Vietnam and Indonesia also showing herding in bearish markets.
  • Post-pandemic, stronger herding is noted in China and Vietnam, while an anti-herding tendency arises in China, Hong Kong, and Singapore, suggesting the need for improved information flow and regulation to mitigate market mispricing.

Article Abstract

We examine herding behavior before, during, and after the Covid-19 pandemic in eight prominent Asian stock markets. Daily stock returns for the period Jan- 2018 to July- 2022 in the markets were investigated using the models prescribed by Chang et al., (2000) and Chiang and Zheng (2010). The empirical results provide strong support to earlier studies by providing robust evidence of herding in Vietnam, Indonesia, India, South Korea, and Singapore when the market is bullish and Indonesia and Vietnam also exhibit herding when the market is bearish. Herding tendency is dominant for Vietnam, India, and Indonesia during the pandemic with the post-pandemic time being more potent for China and Vietnam. Notably, an anti-herding tendency is found in China, Hong Kong, and Singapore. As a policy measure, efficient information dissemination, deterrence of insider trading, and regulation of mispricing can be undertaken.

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Source
http://www.ncbi.nlm.nih.gov/pmc/articles/PMC9721475PMC
http://dx.doi.org/10.1016/j.mex.2022.101961DOI Listing

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