Herding Behavior in Pakistani Financial Markets: A Study of Behavioral Finance

Imran Bashir Dar; Zeeshan Ahmed; Muhammad Usman; Nida Baig

Abstract:

Herding Behavior in Pakistani Financial Markets: A Study of Behavioral FinanceZeeshan AhmedAssistant Professor, University of Lahore, Gujrat Campus, Pakistanzeeshan4282@gmail.comShahbaz KhanAssistant Professor, Foundation University Islamabad Rawalpindi Campus, Pakistanshahbaz.khans@yahoo.comMuhammad UsmanPhD Economics, University of Education, Faisalabad Campus, Pakistanusmanzuel@yahoo.comNida BaigCollege of Public Administration, Huazhong University of Science and Technology, Wuhan, Chinanida_iiie@yahoo.comImran Bashir DarPhD Scholar, International Islamic University Islamabad, Pakistanimraan.basheer@gmail.comAbstractThis paper examines herd behavior in Pakistan stock market using data from the Pakistan Stock Exchange. We test for the presence of herding as suggested by Hwang and Salmon (2004) Model. Results based on monthly data indicate the existence of herd behavior for the years 2013-2018. Evidence of little herd behavior is found during the whole period except in the last months of December, 2012 where more herding practices are being observed in Pakistan Stock Exchange. While investigating the herd behavior using sector wise data, we found that cement industry shows more herding as compared to others sectors.Key Words:Behavioral Finance, Herding Behavior, Pakistan Stock Exchange

research from:

• Foundation University - Faculty of Management Sciences

Year:

2019

Type of Publication:

Article

Journal:

Foundation University Journal of Business & Economics

Volume:

4

Number:

2

Pages:

12-22

Month:

8