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The impacts of stock characteristics and regulatory change on mutual fund herding in Taiwan.

Hou, Tony Chieh-Tse; McKnight, Phillip J.; Weir, Charlie

Authors

Tony Chieh-Tse Hou

Phillip J. McKnight

Charlie Weir

Abstract

This article analyses the trading activity of Taiwanese open-end equity mutual fund herding behaviour over the period of 1996-2008. We found evidence of both directional and directionless herding. We also found that sell-side fund herding leads to price stabilization, whereas buy-side herding results in prices adjusting slowly. We found 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.

Journal Article Type Article
Publication Date Feb 1, 2014
Journal Applied financial economics
Print ISSN 0960-3107
Electronic ISSN 1466-4305
Publisher Taylor & Francis
Peer Reviewed Peer Reviewed
Volume 24
Issue 3
Pages 175-186
Institution Citation HOU, T.C-T., MCKNIGHT, P.J. and WEIR, C. 2014. The impacts of stock characteristics and regulatory change on mutual fund herding in Taiwan. Applied financial economics [online], 24(3), pages 175-186. Available from: https://doi.org/10.1080/09603107.2013.866201
DOI https://doi.org/10.1080/09603107.2013.866201
Keywords Mutual funds; Herding; Regulatory change; Taiwan

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