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Herding Behavior: Intensification and Flow in the Indonesian Stock Market

Author

Listed:
  • Hidayati Lina Nur

    (Management, Universitas Negeri Yogyakarta, Indonesia)

  • Alteza Muniya

    (Management, Universitas Negeri Yogyakarta, Indonesia)

  • Winarno Winarno

    (Management, Universitas Negeri Yogyakarta, Indonesia)

Abstract

Subject and purpose of work: This paper explores whether herding behavior is formed according to the type of investor, how long the transmission of herding behavior occurs, and identifies how big the reaction of herding behavior is and how the flow of herding behavior connects between investors. Materials and methods: The population in this study are companies whose shares are listed in the LQ45 index list for the period January 2015 to December 2017 on the Indonesia Stock Exchange. To find out further about herding behavior, a VAR test will be conducted in this study. Results: The results of herding behavior analysis, based on the type of investor on the Indonesia Stock Exchange, show that there is herding behavior in each type of similar investor. Moreover, there is a certain period for the spread of herding behavior by type of shareholder. Conclusions: The most influential variables on the four types of successive investors are domestic institutional investors, individual foreigners, domestic individuals, and foreign institutions. The four types of investors respond differently to herding behavior.

Suggested Citation

  • Hidayati Lina Nur & Alteza Muniya & Winarno Winarno, 2022. "Herding Behavior: Intensification and Flow in the Indonesian Stock Market," Economic and Regional Studies / Studia Ekonomiczne i Regionalne, Sciendo, vol. 15(3), pages 351-367, September.
    • Handle: RePEc:vrs:ecoreg:v:15:y:2022:i:3:p:351-367:n:1
    DOI: 10.2478/ers-2022-0024
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    References listed on IDEAS

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    More about this item

    Keywords

    herding behavior; investor; stock market;
    All these keywords.

    JEL classification:

    • G41 - Financial Economics - - Behavioral Finance - - - Role and Effects of Psychological, Emotional, Social, and Cognitive Factors on Decision Making in Financial Markets

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