Title: The Price Impact of Same- and Opposing-Direction Herding by Institutions with Different Investment Horizons
Abstract: This paper examines the price impact of the herding behaviour of short- and long-horizon institutional investors. We categorize the institutional herding as same-side herding when both types of institutions herd on the buy-side or sell- side together and as opposite-side herding when short-horizon institutions buy while the long-horizon institutions sell or vice versa. We find that the previously documented destabilizing impact of long-horizon institutional herding is only observed on opposite-side herding. Moreover, short-horizon institutional herding improves the stock price discovery process confirming the belief that they are more informed.
Publication Year: 2021
Publication Date: 2021-05-01
Language: en
Type: article
Indexed In: ['crossref']
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Cited By Count: 4
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