IMPACT OF ECONOMIC POLICY UNCERTAINTY ON HERD BEHAVIOR IN CHINA STOCK MARKET
This study explores the impact of economic policy uncertainty on herd behaviour in the Chinese stock market. As economic policy uncertainty increases, market information becomes highly chaotic and complex, making reliable information scarce and challenging for investors to make independent decision...
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| Format: | Article |
| Language: | English |
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Universiti Utara Malaysia
2025-07-01
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| Series: | The International Journal of Banking and Finance |
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| Online Access: | https://e-journal.uum.edu.my/index.php/ijbf/article/view/25133 |
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| author | Lu Wei Zamri Ahmad |
| author_facet | Lu Wei Zamri Ahmad |
| author_sort | Lu Wei |
| collection | DOAJ |
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This study explores the impact of economic policy uncertainty on herd behaviour in the Chinese stock market. As economic policy uncertainty increases, market information becomes highly chaotic and complex, making reliable information scarce and challenging for investors to make independent decisions. Particularly in the Chinese stock market, where retail investors dominate and generally lack professional financial knowledge and deep market analysis skills, these investors are more likely to mimic the behaviours of other market participants. Using monthly data from January 2011 to December 2023, and employing panel regression for empirical analysis, this research aims to explore the specific effects and mechanisms of economic policy uncertainty on herd behaviour, addressing a gap in the existing literature regarding how economic policy uncertainty directly influences investor behaviour in terms of manner and extent. The study's findings indicate that economic policy uncertainty has a significant and varied impact on herding behaviour across different market segments. Specifically, economic policy uncertainty significantly promotes herding behaviour in the Science and Technology Innovation Board, while it inhibits herding behaviour in the Main Board. Economic policy uncertainty also inhibits herding behaviour in the ChiNext, but not as significantly as in the Main Board. This diversity in impact highlights the complex nature of economic policy uncertainty's influence on herd behaviour.
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| format | Article |
| id | doaj-art-6248488b7dfe4ffb82a5c8026f2155a5 |
| institution | Kabale University |
| issn | 2811-3799 2590-423X |
| language | English |
| publishDate | 2025-07-01 |
| publisher | Universiti Utara Malaysia |
| record_format | Article |
| series | The International Journal of Banking and Finance |
| spelling | doaj-art-6248488b7dfe4ffb82a5c8026f2155a52025-08-20T03:58:06ZengUniversiti Utara MalaysiaThe International Journal of Banking and Finance2811-37992590-423X2025-07-0120210.32890/ijbf2025.20.2.1IMPACT OF ECONOMIC POLICY UNCERTAINTY ON HERD BEHAVIOR IN CHINA STOCK MARKETLu Wei0Zamri Ahmad1School of Management, Universiti Sains MalaysiaSchool of Management, Universiti Sains Malaysia This study explores the impact of economic policy uncertainty on herd behaviour in the Chinese stock market. As economic policy uncertainty increases, market information becomes highly chaotic and complex, making reliable information scarce and challenging for investors to make independent decisions. Particularly in the Chinese stock market, where retail investors dominate and generally lack professional financial knowledge and deep market analysis skills, these investors are more likely to mimic the behaviours of other market participants. Using monthly data from January 2011 to December 2023, and employing panel regression for empirical analysis, this research aims to explore the specific effects and mechanisms of economic policy uncertainty on herd behaviour, addressing a gap in the existing literature regarding how economic policy uncertainty directly influences investor behaviour in terms of manner and extent. The study's findings indicate that economic policy uncertainty has a significant and varied impact on herding behaviour across different market segments. Specifically, economic policy uncertainty significantly promotes herding behaviour in the Science and Technology Innovation Board, while it inhibits herding behaviour in the Main Board. Economic policy uncertainty also inhibits herding behaviour in the ChiNext, but not as significantly as in the Main Board. This diversity in impact highlights the complex nature of economic policy uncertainty's influence on herd behaviour. https://e-journal.uum.edu.my/index.php/ijbf/article/view/25133Economic policy uncertaintyherdingstock market |
| spellingShingle | Lu Wei Zamri Ahmad IMPACT OF ECONOMIC POLICY UNCERTAINTY ON HERD BEHAVIOR IN CHINA STOCK MARKET The International Journal of Banking and Finance Economic policy uncertainty herding stock market |
| title | IMPACT OF ECONOMIC POLICY UNCERTAINTY ON HERD BEHAVIOR IN CHINA STOCK MARKET |
| title_full | IMPACT OF ECONOMIC POLICY UNCERTAINTY ON HERD BEHAVIOR IN CHINA STOCK MARKET |
| title_fullStr | IMPACT OF ECONOMIC POLICY UNCERTAINTY ON HERD BEHAVIOR IN CHINA STOCK MARKET |
| title_full_unstemmed | IMPACT OF ECONOMIC POLICY UNCERTAINTY ON HERD BEHAVIOR IN CHINA STOCK MARKET |
| title_short | IMPACT OF ECONOMIC POLICY UNCERTAINTY ON HERD BEHAVIOR IN CHINA STOCK MARKET |
| title_sort | impact of economic policy uncertainty on herd behavior in china stock market |
| topic | Economic policy uncertainty herding stock market |
| url | https://e-journal.uum.edu.my/index.php/ijbf/article/view/25133 |
| work_keys_str_mv | AT luwei impactofeconomicpolicyuncertaintyonherdbehaviorinchinastockmarket AT zamriahmad impactofeconomicpolicyuncertaintyonherdbehaviorinchinastockmarket |