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Herding and Positive Feedback Trading in the Portuguese Stock Exchange: An Exploratory Investigation

2006Conference object Open access
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dc.contributor.authorFerreira, Mario Pedro
dc.contributor.authorKallinterakis, Vasileios
dc.date.accessioned2010-12-14T12:34:07Z
dc.date.available2010-12-14T12:34:07Z
dc.date.issued2006
dc.description.abstractThe heterogeneity inherent in the composition of the investors’ population is a factor conducive to the complexity of the market. Heterogeneous backgrounds are expected to lead to divergence in investors’ decision-making. However, evidence suggests that the temporary convergence of beliefs and actions is a possibility. Our research attempts to address the issue of two aspects of this convergence, namely positive feedback trading (“trend-chasing”) and herding. Using data from the Portuguese PSI-20 market index, we test for herding and positive feedback trading for the period since the inception of the PSI-20 (January 1993). Results indicate the significance of herding and positive feedback trading towards the index, both of which appear to be experiencing a sharp rise between 1996 and 1999. This coincides with the Portuguese market’s “boom-bust” in the second half of the 1990’s. In line with Hwang and Salmon (2004), herding appears to be rising during periods of “definitive” market direction and exhibits descending tendencies during periods of market fluctuations.por
dc.identifier.citationPaper presented at: 4th Edition The Portuguese Financial Network (PFN) Conference, Porto, Portugal, 6-8 Julho, 2006por
dc.identifier.urihttp://hdl.handle.net/10400.14/3818
dc.language.isoengpor
dc.peerreviewedyespor
dc.publisherPortuguese Financial Networkpor
dc.subjectHerdingpor
dc.subjectFeedback Tradingpor
dc.subjectPortuguesepor
dc.subjectStock marketpor
dc.titleHerding and Positive Feedback Trading in the Portuguese Stock Exchange: An Exploratory Investigationpor
dc.typeconference object
dspace.entity.typePublication
rcaap.rightsopenAccesspor
rcaap.typeconferenceObjectpor

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