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Year 2023, Volume: 4 Issue: 2, 210 - 220, 15.10.2023

Abstract

References

  • Bikhchandani, S., & Sharma, S. (2000). Herd behavior in financial markets. IMF Staff papers, 47(3), 279-310. Callen, Jeffrey L., and Xiaohua Fang. 2015. Short interest and stock price crash risk. Journal of Banking and Finance 60: 181–94.
  • Chaffai, M., & Medhioub, I. (2018). Herding behavior in Islamic GCC stock market: a daily analysis. International Journal of Islamic and Middle Eastern Finance and Management.
  • Chang, E. C., Cheng, J. W., & Khorana, A. (2000). An examination of herd behavior in equity markets: An international perspective. Journal of Banking & Finance, 24(10), 1651-1679.
  • Christie, W. G., & Huang, R. D. (1995). Following the pied piper: Do individual returns herd around the market? Financial Analysts Journal, 51(4), 31-37.
  • Cote, Jane, and Debra Sanders. 1997. Herding Behavior: Explanations and Implications. Behavioral Research in Accounting 9: 20–45
  • Cueva, C., and Rustichini, A. (2015). Is financial instability male-driven? Gender and cognitive skills in experimental asset markets? J. Econ. Behav. Organ. 119, 330–344. doi: 10.1016/j.jebo.2015.08.014
  • Demir, N., and Solakoglu, M. N. (2016), "Herding in Middle Eastern Frontrier Markets: Are Local and Global Factors Important?", Evidence from Asia and International Comparative Studies.
  • Din SMU, Mehmood SK, Shahzad A, Ahmad I, Davidyants A and Abu-Rumman A (2021) The Impact of Behavioral Biases on Herding Behavior of Investors in Islamic Financial Products. Front. Psychol. 11:600570. doi: 10.3389/fpsyg.2020.600570
  • Gabbori, Dina. 2018. The impact of Islamic Events on herding Behaviour in Saudi Arabia financial market. Paper presented at 2018 Annual Meeting of Europe Financial Management Associate, Milan, Italy, June 27–30.
  • Gavriilidis, K., Kallinterakis, V., and Tsalavoutas, I. (2016), "Investor mood, herding and the Ramadan effect", Joural of Economic Behavior & Organization.
  • Gerardi, K., Goette, L., and Meier, S. (2013). Numerical ability predicts mortgage default. Proc. Nal. Acad. Sci. U.S.A. 110, 11267–11271. doi: 10.1073/pnas. 1220568110
  • Hwang, Soosung, and Mark Salmon. 2004. Market stress and herding. Journal of Empirical Finance 11: 585–616. Lao, P., & Singh, H. (2011). Herding behaviour in the Chinese and Indian stock markets. Journal of Asian economics, 22(6), 495-506.
  • (Lediana Marbun et al., 2020). "Is Herding Behaviour Really Exist? An Empirical Study on The Lq-45 And Jakarta Islamic Index," South East Asia Journal of Contemporary Business, Economics and Law, Vol. 21, Issue 5 (April) ISSN 2289-1560.
  • Luo, Z., & Schinckus, C. (2015). Herding behaviour in asymmetric and extreme situations: the case of China. Applied Economics Letters, 22(11), 869-873.
  • Lusardi, A., Mitchell, O. S., Lusardi, A., and Mitchell, O. S. (2014). the economic importance of financial literacy: theory and evidence. J. Econo. Lit. 52, 5–44. doi: 10.1257/jel.52.1.5
  • Metawa, N., Hassan, M. K., Metawa, S., and Safa, M. F. (2018), "Impact of behavioral factors on investors' financial decisions: case of the Egyptian stock market", International Journal of Islamic and middle eastern Finance and management.
  • Mustapha Chaffai & Imed Medhioub, 2018. "Herding behavior in Islamic GCC stock market: a daily analysis," International Journal of Islamic and Middle Eastern Finance and Management, Emerald Group Publishing, vol. 11(2), pages 182-193, June.
  • Noviliya, H. S., & Prasetiono. (2017). Analisis Pendeteksian Herding Behaviour Pada Bursa Saham Emerging dan Developed Market Asia (Negara Indonesia, China, Singapura dan Jepang) Tahun 2012-2016. Diponegoro Journal of Management, 6(3), 1–11.
  • Ramadhan, T., & Mahfud, M. K. (2016). Deteksi Perilaku Herding pada Pasar Saham Indonesia dan Singapura Tahun 2011- 2015. Dipenogoro Journal of Management, 5(2), 1–9
  • Rizal, N., & Damayanti, M. (2019). HERDING BEHAVIOR IN THE INDONESIAN ISLAMIC STOCK MARKET. Journal of Islamic Monetary Economics and Finance, 5(3), 673-690. https://doi.org/10.21098/jimf.v5i3.1079
  • Ross, S. A., Westerfield, R. W., Jaffe, J. F., and Jordan, B. D. (2016). Corporate Finance, 11th Edn. Toronto, ONT: Mcgraw Hill.
  • Setyowati, A., Harmadi, H., and Sunarjanto, S. (2018). Islamic financial literacy and personal financial planning?: a socio-demographic study. Int. J. Econ. Manag. 5, 149–168.
  • Shefrin, H., and Statman, M. (2011). "Behavioural finance in the financial crisis: market efficiency, minsky, and keynes," in Rethinking the Financial Crisis, Working Paper, Santa Clara, CA: Santa Clara University
  • Stavroyiannis, S., and Babalos, V. (2017), "Herding, Faith-Based Investments and the Global Financial Crisis: Empirical Evidence From Static and Dynamic Models", Journal of Behavioral Finance.
  • Zakie, F.N.C. and Rafik, A. (2017), "Herding on shariah stocks on the Indonesian stock exchange", 12th International Conference on Accounting, Business & Economic.

HERDING BEHAVIOR IN ISLAMIC INDICES

Year 2023, Volume: 4 Issue: 2, 210 - 220, 15.10.2023

Abstract

This study aims to assess and identify the impact of herding behaviors on Islamic indices in various developed and developing countries within the financial market. The data used for analysis spans from January 01, 2011, to January 08, 2021, consisting of daily observations of Shariah-compliant indices. The study employs cross-sectional absolute deviation (CSAD) based on quartile deviation analysis to examine the collected data from South Africa, China, America, Canada, India, Pakistan, Sri Lanka, Malaysia, Taiwan, Thailand, Japan, Europe, Turkey, Bahrain, Doha, Dubai, Kuwait, Oman, Qatar, Saudi Arabia, and the United Arab Emirates. The findings indicate the existence of herding behavior in all Islamic indices except Pakistan, Taiwan, and Doha. Notably, herding tendencies were minimal in South Africa, America, Canada, China, India, Malaysia, Sri Lanka, Thailand, Japan, Europe, Turkey, Bahrain, Dubai, Kuwait, Qatar, Saudi Arabia, and the United Arab Emirates, while stronger herding behavior was observed in Bahrain and Taiwan. This paper contributes significantly to the understanding of herding in Islamic indices, with a specific focus on certain countries. The research highlights the novel contribution of human behavior's effect on Islamic indices, emphasizing the significance of this study.

References

  • Bikhchandani, S., & Sharma, S. (2000). Herd behavior in financial markets. IMF Staff papers, 47(3), 279-310. Callen, Jeffrey L., and Xiaohua Fang. 2015. Short interest and stock price crash risk. Journal of Banking and Finance 60: 181–94.
  • Chaffai, M., & Medhioub, I. (2018). Herding behavior in Islamic GCC stock market: a daily analysis. International Journal of Islamic and Middle Eastern Finance and Management.
  • Chang, E. C., Cheng, J. W., & Khorana, A. (2000). An examination of herd behavior in equity markets: An international perspective. Journal of Banking & Finance, 24(10), 1651-1679.
  • Christie, W. G., & Huang, R. D. (1995). Following the pied piper: Do individual returns herd around the market? Financial Analysts Journal, 51(4), 31-37.
  • Cote, Jane, and Debra Sanders. 1997. Herding Behavior: Explanations and Implications. Behavioral Research in Accounting 9: 20–45
  • Cueva, C., and Rustichini, A. (2015). Is financial instability male-driven? Gender and cognitive skills in experimental asset markets? J. Econ. Behav. Organ. 119, 330–344. doi: 10.1016/j.jebo.2015.08.014
  • Demir, N., and Solakoglu, M. N. (2016), "Herding in Middle Eastern Frontrier Markets: Are Local and Global Factors Important?", Evidence from Asia and International Comparative Studies.
  • Din SMU, Mehmood SK, Shahzad A, Ahmad I, Davidyants A and Abu-Rumman A (2021) The Impact of Behavioral Biases on Herding Behavior of Investors in Islamic Financial Products. Front. Psychol. 11:600570. doi: 10.3389/fpsyg.2020.600570
  • Gabbori, Dina. 2018. The impact of Islamic Events on herding Behaviour in Saudi Arabia financial market. Paper presented at 2018 Annual Meeting of Europe Financial Management Associate, Milan, Italy, June 27–30.
  • Gavriilidis, K., Kallinterakis, V., and Tsalavoutas, I. (2016), "Investor mood, herding and the Ramadan effect", Joural of Economic Behavior & Organization.
  • Gerardi, K., Goette, L., and Meier, S. (2013). Numerical ability predicts mortgage default. Proc. Nal. Acad. Sci. U.S.A. 110, 11267–11271. doi: 10.1073/pnas. 1220568110
  • Hwang, Soosung, and Mark Salmon. 2004. Market stress and herding. Journal of Empirical Finance 11: 585–616. Lao, P., & Singh, H. (2011). Herding behaviour in the Chinese and Indian stock markets. Journal of Asian economics, 22(6), 495-506.
  • (Lediana Marbun et al., 2020). "Is Herding Behaviour Really Exist? An Empirical Study on The Lq-45 And Jakarta Islamic Index," South East Asia Journal of Contemporary Business, Economics and Law, Vol. 21, Issue 5 (April) ISSN 2289-1560.
  • Luo, Z., & Schinckus, C. (2015). Herding behaviour in asymmetric and extreme situations: the case of China. Applied Economics Letters, 22(11), 869-873.
  • Lusardi, A., Mitchell, O. S., Lusardi, A., and Mitchell, O. S. (2014). the economic importance of financial literacy: theory and evidence. J. Econo. Lit. 52, 5–44. doi: 10.1257/jel.52.1.5
  • Metawa, N., Hassan, M. K., Metawa, S., and Safa, M. F. (2018), "Impact of behavioral factors on investors' financial decisions: case of the Egyptian stock market", International Journal of Islamic and middle eastern Finance and management.
  • Mustapha Chaffai & Imed Medhioub, 2018. "Herding behavior in Islamic GCC stock market: a daily analysis," International Journal of Islamic and Middle Eastern Finance and Management, Emerald Group Publishing, vol. 11(2), pages 182-193, June.
  • Noviliya, H. S., & Prasetiono. (2017). Analisis Pendeteksian Herding Behaviour Pada Bursa Saham Emerging dan Developed Market Asia (Negara Indonesia, China, Singapura dan Jepang) Tahun 2012-2016. Diponegoro Journal of Management, 6(3), 1–11.
  • Ramadhan, T., & Mahfud, M. K. (2016). Deteksi Perilaku Herding pada Pasar Saham Indonesia dan Singapura Tahun 2011- 2015. Dipenogoro Journal of Management, 5(2), 1–9
  • Rizal, N., & Damayanti, M. (2019). HERDING BEHAVIOR IN THE INDONESIAN ISLAMIC STOCK MARKET. Journal of Islamic Monetary Economics and Finance, 5(3), 673-690. https://doi.org/10.21098/jimf.v5i3.1079
  • Ross, S. A., Westerfield, R. W., Jaffe, J. F., and Jordan, B. D. (2016). Corporate Finance, 11th Edn. Toronto, ONT: Mcgraw Hill.
  • Setyowati, A., Harmadi, H., and Sunarjanto, S. (2018). Islamic financial literacy and personal financial planning?: a socio-demographic study. Int. J. Econ. Manag. 5, 149–168.
  • Shefrin, H., and Statman, M. (2011). "Behavioural finance in the financial crisis: market efficiency, minsky, and keynes," in Rethinking the Financial Crisis, Working Paper, Santa Clara, CA: Santa Clara University
  • Stavroyiannis, S., and Babalos, V. (2017), "Herding, Faith-Based Investments and the Global Financial Crisis: Empirical Evidence From Static and Dynamic Models", Journal of Behavioral Finance.
  • Zakie, F.N.C. and Rafik, A. (2017), "Herding on shariah stocks on the Indonesian stock exchange", 12th International Conference on Accounting, Business & Economic.
There are 25 citations in total.

Details

Primary Language English
Subjects Finance
Journal Section Articles
Authors

Jahanzaib Alvi 0000-0001-9145-6545

Muhammad Rehan 0000-0001-5056-5307

Early Pub Date October 14, 2023
Publication Date October 15, 2023
Acceptance Date October 3, 2023
Published in Issue Year 2023 Volume: 4 Issue: 2

Cite

APA Alvi, J., & Rehan, M. (2023). HERDING BEHAVIOR IN ISLAMIC INDICES. Malatya Turgut Özal Üniversitesi İşletme Ve Yönetim Bilimleri Dergisi, 4(2), 210-220.