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The impacts of stock characteristics and regulatory change on mutual fund herding in Taiwan

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  • Tony Chieh-Tse Hou
  • Phillip J. McKnight
  • Charlie Weir

Abstract

This article analyses the trading activity of Taiwanese open-end equity mutual fund herding behaviour over the period of 1996--2008. We found evidence of both directional and directionless herding. We also found that sell-side fund herding leads to price stabilization, whereas buy-side herding results in prices adjusting slowly. We found that the abolition of qualified foreign institutional investor (QFII) has reduced directionless and sell-side herding but has had no effect on buy-side herding.

Suggested Citation

  • Tony Chieh-Tse Hou & Phillip J. McKnight & Charlie Weir, 2014. "The impacts of stock characteristics and regulatory change on mutual fund herding in Taiwan," Applied Financial Economics, Taylor & Francis Journals, vol. 24(3), pages 175-186, February.
    • Handle: RePEc:taf:apfiec:v:24:y:2014:i:3:p:175-186
    DOI: 10.1080/09603107.2013.866201
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    Cited by:

    1. Omokolade Akinsomi & Yener Coskun & Rangan Gupta & Chi Keung Marco Lau, 2016. "Impact of Volatility and Equity Market Uncertainty on Herd Behavior: Evidence from UK REITs," Working Papers 201688, University of Pretoria, Department of Economics.

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