An Examination of Herding Behavior in the Brazilian Equity Market
The aim of the present study is to investigate herding behavior in the Brazilian stock market. This bias is quite common in times of market downturns and can cause investors to suffer large losses. It is very difficult to effectively identify its real occurrence. Through the method of Chang et al. (...
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| Format: | Article |
| Language: | English |
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FUCAPE Business School
2021-01-01
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| Series: | BBR: Brazilian Business Review |
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| Online Access: | http://www.redalyc.org/articulo.oa?id=123068387001 |
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| author | Patrícia Fernanda Correia Lima Signorelli Eduardo Camilo-da-Silva Claudio Henrique da Silveira Barbedo |
| author_facet | Patrícia Fernanda Correia Lima Signorelli Eduardo Camilo-da-Silva Claudio Henrique da Silveira Barbedo |
| author_sort | Patrícia Fernanda Correia Lima Signorelli |
| collection | DOAJ |
| description | The aim of the present study is to investigate herding behavior in the Brazilian stock market. This bias is quite common in times of market downturns and can cause investors to suffer large losses. It is very difficult to effectively identify its real occurrence. Through the method of Chang et al. (2000), it is possible to show that the occurrence of herd behavior is associated with the following phenomena: high trading volume; high volatility, market downturn; and misbalancing of orders. The main contribution of the paper is to identify that herding behavior reacts asymmetrically to the sign of past shocks. The results suggest that an intense selling movement can generate uncertainty in agents, causing them to imitate others in imminent loss periods. |
| format | Article |
| id | doaj-art-0670d23aef5148b8be45137e9b3b084e |
| institution | Kabale University |
| issn | 1807-734X |
| language | English |
| publishDate | 2021-01-01 |
| publisher | FUCAPE Business School |
| record_format | Article |
| series | BBR: Brazilian Business Review |
| spelling | doaj-art-0670d23aef5148b8be45137e9b3b084e2025-02-06T23:39:33ZengFUCAPE Business SchoolBBR: Brazilian Business Review1807-734X2021-01-0118323625410.15728/bbr.2021.18.3.1An Examination of Herding Behavior in the Brazilian Equity MarketPatrícia Fernanda Correia Lima SignorelliEduardo Camilo-da-SilvaClaudio Henrique da Silveira BarbedoThe aim of the present study is to investigate herding behavior in the Brazilian stock market. This bias is quite common in times of market downturns and can cause investors to suffer large losses. It is very difficult to effectively identify its real occurrence. Through the method of Chang et al. (2000), it is possible to show that the occurrence of herd behavior is associated with the following phenomena: high trading volume; high volatility, market downturn; and misbalancing of orders. The main contribution of the paper is to identify that herding behavior reacts asymmetrically to the sign of past shocks. The results suggest that an intense selling movement can generate uncertainty in agents, causing them to imitate others in imminent loss periods.http://www.redalyc.org/articulo.oa?id=123068387001herd behaviormarket microstructurebehavioral finance |
| spellingShingle | Patrícia Fernanda Correia Lima Signorelli Eduardo Camilo-da-Silva Claudio Henrique da Silveira Barbedo An Examination of Herding Behavior in the Brazilian Equity Market BBR: Brazilian Business Review herd behavior market microstructure behavioral finance |
| title | An Examination of Herding Behavior in the Brazilian Equity Market |
| title_full | An Examination of Herding Behavior in the Brazilian Equity Market |
| title_fullStr | An Examination of Herding Behavior in the Brazilian Equity Market |
| title_full_unstemmed | An Examination of Herding Behavior in the Brazilian Equity Market |
| title_short | An Examination of Herding Behavior in the Brazilian Equity Market |
| title_sort | examination of herding behavior in the brazilian equity market |
| topic | herd behavior market microstructure behavioral finance |
| url | http://www.redalyc.org/articulo.oa?id=123068387001 |
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