Does herding among Swedish institutional investors stabilize or destabilize stock prices?
Independent thesis Advanced level (degree of Master (Two Years)), 20 credits / 30 HE creditsStudent thesis
Empirical findings on herding behavior among institutional investors suggest that those market participants speed up the price adjustment to new information and as such stabilize stock prices. Other findings indicate the opposite, that institutional herds drive stock prices away from fundamental values, and thus destabilize stock prices. This study examines the effect that Swedish institutional investors have on the stock prices on the Stockholm Stock Exchange. More precisely, we analyze the relationship of institutional herding with future excess stock returns. Major findings from this paper suggest that persistent herding among Swedish institutional investors leads to future long-term return reversals, which to some extent indicates a destabilizing influence at long horizons.
Place, publisher, year, edition, pages
2016. , 39 p.
herding, herding persistency, institutional investors, asset pricing
Economics and Business
IdentifiersURN: urn:nbn:se:uu:diva-298134OAI: oai:DiVA.org:uu-298134DiVA: diva2:944760
Subject / course
Master Programme in Business and Management