Investor attention to the Eurozone crisis and herding effects in national bank stock indexes

Peltomäki, Jarkko; Vähämaa, Emilia

doi:10.1016/j.frl.2015.05.009

Cited by 13 publications

(12 citation statements)

References 19 publications

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“…Despite the lack of conclusiveness in the empirical results both in emerging and developed markets, herding is expected to be more pronounced under extreme market conditions (Christie and Huang, 1995;Chang et al, 2000;Chiang and Zheng, 2010;Economou et al, 2011) when individual investors are more likely to follow the crowd instead of their own beliefs/knowledge (Christie and Huang, 1995). Mobarek et al (2014) provide evidence of significant herding effects in various European stock markets during the global financial crisis and the Eurozone crisis, while Peltomäki and Vähämaa (2015) document that herding effects in the EMU markets affected herding in the non-EMU markets from September 2008 to January 2014. The Greek stock market provides an interesting setting for analysis due to the unprecedented debt crisis that occurred in recent years and the potential spillover effects on other Eurozone markets.…”

Section: Introductionmentioning

confidence: 97%

Testing for herding in the Athens Stock Exchange during the crisis period

Economou

Katsikas

Vickers

2016

Finance Research Letters

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Section: Introductionmentioning

confidence: 97%

Testing for herding in the Athens Stock Exchange during the crisis period

Economou

Katsikas

Vickers

2016

Finance Research Letters

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“…Several studies have measured investor attention using Google Trends. Peltomäki and Vähämaa (2015) related investor attention (through Google Trends) to the Euro Zone crisis, observing herding on the indices representing banking sector stocks from 2008 to 2014. The researchers separated countries into two groups: those participating in the European Monetary Union (EMU) and those not participating in the EMU.…”

Section: Literature Reviewmentioning

confidence: 99%

“…Thus, existing research suggests there is value in investigating how investors seek and receive information that underlies their investment decisions, considering the influences of movements in the overall market. Furthermore, to emphasize the importance of this study, few studies have linked investor attention and herding, for example, Peltomäki and Vähämaa (2015) and Hsieh et al . (2020).…”

Section: Literature Reviewmentioning

confidence: 99%

Herding and Google search queries in the Brazilian stock market

Carvalho,

Jordão da Gama Silva,

Klotzle

2023

RBF

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PurposeThis study investigates the presence of herding in the Brazilian stock market between 2012 and 2020 and associates it with the volume of searches on the Google platform.Design/methodology/approachFollowing methodologies are used to investigate the presence of herding: the Cross-Sectional Standard Deviation of Returns (CSSD), the Cross-Sectional Absolute Deviation (CSAD) and the Cross-Sectional Deviation of Asset Betas to the Market.FindingsMost of the models detected herding. In addition, there was a causal relationship between peaks in Google search volumes and the incidence of herding across the whole period, especially in 2015 and 2019.Originality/valueThis study suggests that confirmation bias influences investors' decisions to buy or sell assets.

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“…(2021) investigate the herding behaviour in Islamic Sharia compliant stocks of Malaysia and report the herding behaviour in both up and down-market conditions. Based on the above-mentioned literature, it can be noted that there is a great lack of empirical research into herding in the purely Islamic bank industry, even though many studies examine herding in conventional bank markets (Cakan and Balagyozyan, 2014; Peltomaki and Vahamaa, 2015). Therefore, this study sheds the light on one of the fastest growing and largest segments of the global Islamic finance industry – Islamic banks.…”

Section: Introductionmentioning

confidence: 99%

Herding behaviour in the Islamic bank market: evidence from the Gulf region

Yousaf

Alokla

2022

RBF

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PurposeThis study examines herding in Islamic bank equity markets under various market conditions (up/down, high/low trading and high/low volatility) and during events such as Organization of the Petroleum Exporting Countries (OPEC) meeting days, Ramadan, the Gulf Cooperation Council (GCC) crisis of 2017 and the COVID-19 pandemic. The authors also look at the impact of rising and falling oil prices on herding behaviour.Design/methodology/approachThis study uses the model of Chang et al. (2000) to estimate herding behaviour in the Islamic bank markets.FindingsFirst, the authors estimate herding at the GCC region level, and the results reveal an absence of herding under all market conditions and during all the events considered, except for the GCC crisis of 2017. Second, the authors investigate herding in four Gulf countries (Saudi Arabia, United Arab Emirates [UAE], Qatar and Kuwait) separately and find that herding is evident in all these countries during various market conditions. During Ramadan, herding appears in the Saudi Arabia and Kuwait Islamic bank equity markets. Herding is not prevalent during OPEC meeting days in any of the markets, whereas herding is evident in Saudi Arabia, UAE and Kuwait Islamic bank equity markets during the GCC crisis of 2017 and the COVID-19 pandemic. Lastly, the rising and falling oil prices do not influence herding at either GCC region or country level.Practical implicationsFrom the practitioner's perspective, this study provides useful insights for investors in Islamic banks and policymakers, in terms of asset pricing, portfolio diversification, trading strategies and market stability.Originality/valueMany studies explore herding in the equity markets of Muslim majority countries, but not specifically in the Islamic bank market. This study fills this literature gap by comprehensively examining herding in Islamic bank equity markets under various market conditions (up/down, high/low trading and high/low volatility) and during events, such as OPEC meeting days, Ramadan, the GCC crisis of 2017 and the COVID-19 pandemic.

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Investor attention to the Eurozone crisis and herding effects in national bank stock indexes

Cited by 13 publications

References 19 publications

Testing for herding in the Athens Stock Exchange during the crisis period

Testing for herding in the Athens Stock Exchange during the crisis period

Herding and Google search queries in the Brazilian stock market

Herding behaviour in the Islamic bank market: evidence from the Gulf region

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