The Impacts of Stock Characteristics and Regulatory Change on Mutual Fund Herding in Taiwan
Posted: 6 Dec 2013
Date Written: November 1, 2012
This paper analyzes the trading activity of Taiwanese open-end equity mutual fund herding behaviour over the period of 1996 to 2008. We find evidence of both directional and directionless herding. We also find that sell-side fund herding leads to price stabilization whereas buy side herding results in, prices adjusting slowly. We find that the abolition of Qualified Foreign Institutional Investor (QFII) has reduced directionless and sell side herding but has had no effect on buy side herding.
Keywords: herding; mutual fund; QFII; Taiwan
JEL Classification: G12; G14; G15
Suggested Citation: Suggested Citation