An investigative study on herding behavior in the Irish stock market

Bangalore Nagendra, Raghavendra Prasad (2022) An investigative study on herding behavior in the Irish stock market. Masters thesis, Dublin, National College of Ireland.

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Abstract

The herd mentality factor influences investors' capacity to make prudent financial decisions as well as behavioral biases or bad choices. The aim of the study is to better understand how market players behave, with a focus on herd behavior, which occurs when investors copy the trading strategies of other investors. With a particular focus on the Irish stock market, it further examines the magnitude of these behavior not only under standard conditions but also during significant upturns and extreme downturns. The stock that makes up the Irish stock index ISEG - 20 is used to analyze herd behavior using daily returns for the period of 2015 to 2021, which includes the worldwide pandemic phase (Covid-19). To test the herding behavior in this study, we use two different measures. First, Christie and Huang (1995) (CH) liner model, where our findings revealed no proof of herding during periods of extreme market conditions, and second, Chang et al. (2000) (CCK) nonlinear model, which likewise found no proof of herding during periods of bull and bear markets in Ireland. The findings suggest that empirical herding measurements are sensitive to the approach taken to data collection.

Item Type:	Thesis (Masters)
Subjects:	H Social Sciences > HG Finance > Investment H Social Sciences > HG Finance > Investment > Stock Exchange > Irish Stock Exchange
Divisions:	School of Business > Master of Science in Finance
Depositing User:	Clara Chan
Date Deposited:	25 Oct 2022 14:44
Last Modified:	25 Oct 2022 14:44
URI:	https://norma.ncirl.ie/id/eprint/5818

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