Herding Behavior Evidence from Portuguese Mutual Funds

Preprint
Publisher Website
Google Scholar
Abstract
We test for herding by Portuguese mutual funds over the period of 1998 to 2000. We employ the (herding) measure of trading suggested by Lakonishok et al. (1992). We find strong evidence of herding behavior for Portuguese mutual funds. Furthermore, our results suggest that the level of herding is 4 to 5 times stronger than the herding found for institutional investors in mature markets. The herding effect seems to affect, as likely, purchases and sales of stocks. There seems to be a stronger tendency to herd among medium-cap funds rather than very large or very small funds, and among funds with less stocks. Lastly, herding seems to decrease when the stock market is doing well or is more volatile.

This publication has 0 references indexed in Scilit: