IDEAS home Printed from https://ideas.repec.org/a/gam/jrisks/v13y2025i4p78-d1637127.html
   My bibliography  Save this article

Investor Psychology in the Bangladesh Equity Market: An Examination of Herding Behavior Across Diverse Market States

Author

Listed:
  • Muhammad Enamul Haque

    (School of Business and Economics, United International University, United City, Madani Avenue, Dhaka 1212, Bangladesh)

  • Mahmood Osman Imam

    (Department of Finance, University of Dhaka, Bangladesh, Nilkhet Road, Dhaka 1000, Bangladesh)

Abstract

The results reveal significant evidence of herding in the overall, bearish, and extended crisis market phases during extreme downturns, while the magnitude of market returns in the tail distribution is considered. Asymmetric herding behavior is more pronounced and prevalent, conditioned by market dimensions like return direction, trading volume, and volatility, with CSSD proving more effective than CSAD in detecting asymmetric patterns. Notably, herding strongly appears in the COVID-19 market during periods of abnormally high market volatility, reflecting heightened market sentiment. Applying Dow Theory to delineate bull and bear market phases significantly improved the methodological complexity and analytical depth related to herding behavior. These findings suggest policy implications for regulators and market participants in minimizing herding effects to create an efficient market environment through enhanced market surveillance, improved investor education, and the use of advanced technologies.

Suggested Citation

  • Muhammad Enamul Haque & Mahmood Osman Imam, 2025. "Investor Psychology in the Bangladesh Equity Market: An Examination of Herding Behavior Across Diverse Market States," Risks, MDPI, vol. 13(4), pages 1-31, April.
    • Handle: RePEc:gam:jrisks:v:13:y:2025:i:4:p:78-:d:1637127
    as

    Download full text from publisher

    File URL: https://www.mdpi.com/2227-9091/13/4/78/pdf
    Download Restriction: no
    File URL: https://www.mdpi.com/2227-9091/13/4/78/
    Download Restriction: no
    ---><---

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:gam:jrisks:v:13:y:2025:i:4:p:78-:d:1637127. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: MDPI Indexing Manager (email available below). General contact details of provider: https://www.mdpi.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.