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Herding and Google search queries in the Brazilian stock market

Author

Listed:
  • Jeferson Carvalho
  • Paulo Vitor Jordão da Gama Silva
  • Marcelo Cabus Klotzle

Abstract

Purpose - This 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/approach - Following 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. Findings - Most 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/value - This study suggests that confirmation bias influences investors' decisions to buy or sell assets.

Suggested Citation

  • Jeferson Carvalho & Paulo Vitor Jordão da Gama Silva & Marcelo Cabus Klotzle, 2023. "Herding and Google search queries in the Brazilian stock market," Review of Behavioral Finance, Emerald Group Publishing Limited, vol. 16(2), pages 341-359, September.
    • Handle: RePEc:eme:rbfpps:rbf-12-2022-0296
    DOI: 10.1108/RBF-12-2022-0296
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    More about this item

    Keywords

    Efficient market hypothesis; Behavioral finance; Herding effect; Google trends; Brazilian stock market; G10; G15; G40;
    All these keywords.

    JEL classification:

    • G10 - Financial Economics - - General Financial Markets - - - General (includes Measurement and Data)
    • G15 - Financial Economics - - General Financial Markets - - - International Financial Markets
    • G40 - Financial Economics - - Behavioral Finance - - - General

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