Positive Trading Effects and Herding Behavior in Asian Markets: Evidence from Mutual Funds

The International Journal of Business and Finance Research, Vol. 4, No. 2, pp. 177-188, 2010

12 Pages Posted: 9 Sep 2010

See all articles by Sandra Hsieh

Sandra Hsieh

National Taichung University of Science and Technology

Tzu-Yi yang

Hwa Hsia Institute of Technology

Yang Yu Tai

Chung Yuan Christian University

Date Written: 2010

Abstract

Many studies on mutual funds have demonstrated the existence of herding behavior and positive feedback trading. However, most research has not examined the characteristics of herding behavior, but simply attempted to determine if herding behavior exists. These studies fail to probe into the actual causes behind herding behavior. The current study fills this gap in the literature. The study is based on the herding definition of Bikhchndani and Sarma (2001) and examines Asian country mutual funds with a six-year sample period. We examine if there are “Buy high, sell low”, “Buy previous winners, sell previous losers”, “positive feedback trading,” and “herding behavior” in global mutual funds. We also explore the possible factors behind these phenomena.

Keywords: Mutual fund, positive feedback effect, herding, financial crisis, behavioral finance

JEL Classification: C30, G01, G15

Suggested Citation

Hsieh, Sandra and yang, Tzu-Yi and Tai, Yang Yu, Positive Trading Effects and Herding Behavior in Asian Markets: Evidence from Mutual Funds (2010). The International Journal of Business and Finance Research, Vol. 4, No. 2, pp. 177-188, 2010, Available at SSRN: https://ssrn.com/abstract=1667139

Sandra Hsieh (Contact Author)

National Taichung University of Science and Technology ( email )

Department of Finance
National Taichung Institute of Technology
Taichung, 404
Taiwan

Tzu-Yi Yang

Hwa Hsia Institute of Technology ( email )

Zhonghe, Taipei County
Taiwan

Yang Yu Tai

Chung Yuan Christian University ( email )

22 Pu-Jen, Pu-chung Li
Chung-Li, 32023
Taiwan

Do you have negative results from your research you’d like to share?

Paper statistics

Downloads
296
Abstract Views
1,323
Rank
187,597
PlumX Metrics