Research Paper
Year: 2021 | Month: December | Volume: 8 | Issue: 12 | Pages: 614-621
DOI: https://doi.org/10.52403/ijrr.20211274
Analysis of Herding Behavior in Developing Countries
Ririn Stefani Silitonga1, Isfenti Sadalia2, Amlys Syahputra Silalahi3
1,2,3Faculty Economics and Business, University of Sumatera Utara, Medan, Indonesia.
Corresponding Author: Ririn Stefani Silitonga
ABSTRACT
When faced with market uncertainty and high volatility in financial markets, the potential for herding behavior in the stock market is likely to increase. This will cause instability in the financial market and also the economy of a country. The purpose of this study is to analyze herding behavior in the stock markets of developing countries including China, the Philippines, India, Indonesia, Korea, Malaysia, Pakistan, Taiwan and Thailand. This type of research is quantitative research and the population in this study is stocks listed on the Stock Exchanges of all developing countries with a time period from January 2016 to December 2020. The sampling method used is purposive sampling. The data used are monthly stock index data, VIX, world oil prices and the fed funds rate. Data analysis was performed through panel data regression, which is a combination of cross section and time series using the Eviews program. The results showed that there was no herding behavior in developing countries. The result of this research is that the fed fund rate has a significant effect on herding behavior in developing countries, especially in Indonesia.
Keywords: Herding, Market Volatility, Oil Price, Fed Fund Rate.
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