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Herding Behaviour in Asutralian stock market: Evidence on COVID-19 effect

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  • Christian Espinosa-Méndez
  • José Arias

Abstract

This is the first article in investigating how COVID-19 affects Oceania’s financial markets. Specifically, we investigate if COVID-19 pandemic has an effect on herding behaviour in the Australian stock market. Using a sample of all firms listed over the period from 10 June 2008 to 19 June 2020, we find evidence that COVID-19 pandemic increases herding behaviour. The results report that herding behaviour manifests during crisis and extreme periods.

Suggested Citation

  • Christian Espinosa-Méndez & José Arias, 2021. "Herding Behaviour in Asutralian stock market: Evidence on COVID-19 effect," Applied Economics Letters, Taylor & Francis Journals, vol. 28(21), pages 1898-1901, December.
    • Handle: RePEc:taf:apeclt:v:28:y:2021:i:21:p:1898-1901
    DOI: 10.1080/13504851.2020.1854659
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    11. Chang, Chih-Hsiang & Lin, Shih-Jia, 2015. "The effects of national culture and behavioral pitfalls on investors' decision-making: Herding behavior in international stock markets," International Review of Economics & Finance, Elsevier, vol. 37(C), pages 380-392.
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    Cited by:

    1. Nguyen, Huu Manh & Bakry, Walid & Vuong, Thi Huong Giang, 2023. "COVID-19 pandemic and herd behavior: Evidence from a frontier market," Journal of Behavioral and Experimental Finance, Elsevier, vol. 38(C).
    2. Alexakis, Christos & Chantziaras, Antonios & Economou, Fotini & Eleftheriou, Konstantinos & Grose, Christos, 2023. "Animal Behavior in Capital markets: Herding formation dynamics, trading volume, and the role of COVID-19 pandemic," The North American Journal of Economics and Finance, Elsevier, vol. 67(C).
    3. Bedford, Anna & Bugeja, Martin & Ghannam, Samir & Jeganathan, Davina & Ma, Nelson, 2023. "Were CEO pay cuts during the COVID-19 pandemic merely symbolic? Shareholders' reaction and outrage," Pacific-Basin Finance Journal, Elsevier, vol. 79(C).
    4. Ooi Kok Loang & Zamri Ahmad, 2024. "Does Volatility Cause Herding in Malaysian Stock Market? Evidence from Quantile Regression Analysis," Millennial Asia, , vol. 15(2), pages 197-215, June.
    5. Terver Kumeka & Oluwatosin Adeniyi, 2023. "Stock markets response to contagious disease: Evidence on the impact of COVID‐19 in the three worst hit African economies," International Journal of Finance & Economics, John Wiley & Sons, Ltd., vol. 28(4), pages 4476-4499, October.
    6. Faisal Alnori & Moid U. Ahmad, 2022. "Herd Mentality Amongst Equity Investors During COVID-19: Evidences from Saudi Arabia," International Journal of Economics and Financial Issues, Econjournals, vol. 12(4), pages 40-46, July.
    7. Samuel Tabot Enow, 2023. "Detecting the Herding Behaviour in the South African Stock Market and its Implications," International Journal of Economics and Financial Issues, Econjournals, vol. 13(2), pages 88-92, March.
    8. Wasim ul Rehman & Omur Saltik & Faryal Jalil & Suleyman Degirmen, 2024. "Viral decisions: unmasking the impact of COVID-19 info and behavioral quirks on investment choices," Palgrave Communications, Palgrave Macmillan, vol. 11(1), pages 1-20, December.

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