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

Authors

  • Zeeshan Ahmed University of Lahore, Gujrat Campus, Pakistan
  • Shahbaz Khan Huazhong University of Science and Technology, Wuhan, China
  • Muhammad Usman University of Education, Faisalabad Campus, Pakistan
  • Nida Baig Huazhong University of Science and Technology, Wuhan, China
  • Imran Bashir Dar International Islamic University, Islamabad, Pakistan

DOI:

https://doi.org/10.33897/fujbe.v4i2.139

Keywords:

Behavioral Finance, Herding Behavior

Abstract

This 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.

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Published

2019-08-31

Issue

Vol. 4 No. 2 (2019): Foundation University Journal of Business & Economics, 2019, Vol. 4, No. 2

Section

Articles