Is ‘Herding’ Peculiar to Certain Stocks? A Perspective from the Turkish Stock Market
We test the existence of daily/weekly herding behavior in the Turkish stock market between June 2013 and October 2020 on the stocks that remained listed on the benchmark stock index over the analysis period. Rather than performing the test on a set of stocks belonging to firms with different charact...
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| Format: | Article |
| Language: | English |
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Selcuk University Press
2023-12-01
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| Series: | Selçuk Üniversitesi Sosyal Bilimler Enstitüsü Dergisi |
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| Online Access: | https://dergipark.org.tr/tr/download/article-file/3344249 |
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| author | İrem Çetinkaya Mustafa Yildirim |
| author_facet | İrem Çetinkaya Mustafa Yildirim |
| author_sort | İrem Çetinkaya |
| collection | DOAJ |
| description | We test the existence of daily/weekly herding behavior in the Turkish stock market between June 2013 and October 2020 on the stocks that remained listed on the benchmark stock index over the analysis period. Rather than performing the test on a set of stocks belonging to firms with different characteristics as in the literature, we conduct it on subsets of stocks we form based on foreign ownership ratio, firm size (measured by total assets), and prominent financial indicators (price-to-earnings and market-to-book ratios). Our analysis provides no evidence of herding behavior but yields important insights. Specifically, it demonstrates that financial indicators have no bearing on herding behavior, but investor type and firm size may. A slight indication of herding tendency emerges in stocks with a relatively higher investment from local investors but disappears in those with a comparatively higher investment from foreign investors. This finding suggests a potential market knowledge disparity between local and foreign investors, with the less expert being the local group. Moreover, a faint sign of herding tendency also appears in stocks that belong to small firms, possibly due to a heightened uncertainty inherent in such stocks. |
| format | Article |
| id | doaj-art-8689b8bed1f345468b6749c42535d3b8 |
| institution | Kabale University |
| issn | 2667-4750 |
| language | English |
| publishDate | 2023-12-01 |
| publisher | Selcuk University Press |
| record_format | Article |
| series | Selçuk Üniversitesi Sosyal Bilimler Enstitüsü Dergisi |
| spelling | doaj-art-8689b8bed1f345468b6749c42535d3b82025-01-03T00:46:52ZengSelcuk University PressSelçuk Üniversitesi Sosyal Bilimler Enstitüsü Dergisi2667-47502023-12-015218919810.52642/susbed.1345803154Is ‘Herding’ Peculiar to Certain Stocks? A Perspective from the Turkish Stock Marketİrem ÇetinkayaMustafa Yildirim0IZMIR KATIP CELEBI UNIVERSITYWe test the existence of daily/weekly herding behavior in the Turkish stock market between June 2013 and October 2020 on the stocks that remained listed on the benchmark stock index over the analysis period. Rather than performing the test on a set of stocks belonging to firms with different characteristics as in the literature, we conduct it on subsets of stocks we form based on foreign ownership ratio, firm size (measured by total assets), and prominent financial indicators (price-to-earnings and market-to-book ratios). Our analysis provides no evidence of herding behavior but yields important insights. Specifically, it demonstrates that financial indicators have no bearing on herding behavior, but investor type and firm size may. A slight indication of herding tendency emerges in stocks with a relatively higher investment from local investors but disappears in those with a comparatively higher investment from foreign investors. This finding suggests a potential market knowledge disparity between local and foreign investors, with the less expert being the local group. Moreover, a faint sign of herding tendency also appears in stocks that belong to small firms, possibly due to a heightened uncertainty inherent in such stocks.https://dergipark.org.tr/tr/download/article-file/3344249herding behaviorfirm sizeforeign ownershipfinancial ratiossürü davranışıfirma büyüklüğüyabancı mülkiyetifinansal oranlar |
| spellingShingle | İrem Çetinkaya Mustafa Yildirim Is ‘Herding’ Peculiar to Certain Stocks? A Perspective from the Turkish Stock Market Selçuk Üniversitesi Sosyal Bilimler Enstitüsü Dergisi herding behavior firm size foreign ownership financial ratios sürü davranışı firma büyüklüğü yabancı mülkiyeti finansal oranlar |
| title | Is ‘Herding’ Peculiar to Certain Stocks? A Perspective from the Turkish Stock Market |
| title_full | Is ‘Herding’ Peculiar to Certain Stocks? A Perspective from the Turkish Stock Market |
| title_fullStr | Is ‘Herding’ Peculiar to Certain Stocks? A Perspective from the Turkish Stock Market |
| title_full_unstemmed | Is ‘Herding’ Peculiar to Certain Stocks? A Perspective from the Turkish Stock Market |
| title_short | Is ‘Herding’ Peculiar to Certain Stocks? A Perspective from the Turkish Stock Market |
| title_sort | is herding peculiar to certain stocks a perspective from the turkish stock market |
| topic | herding behavior firm size foreign ownership financial ratios sürü davranışı firma büyüklüğü yabancı mülkiyeti finansal oranlar |
| url | https://dergipark.org.tr/tr/download/article-file/3344249 |
| work_keys_str_mv | AT iremcetinkaya isherdingpeculiartocertainstocksaperspectivefromtheturkishstockmarket AT mustafayildirim isherdingpeculiartocertainstocksaperspectivefromtheturkishstockmarket |