THE EFFECT OF COVID-19 ON HERDING BEHAVIOR: EVIDENCE FROM AFRICAN EMERGING MARKETS

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Finans Ekonomi ve Sosyal Araştırmalar Dergisi
Volume:8 Issue:3
THE EFFECT OF COVID-19 ON HERDING BEHAVIOR: EVIDENCE FROM AFRICAN EMERGING MARKETS

THE EFFECT OF COVID-19 ON HERDING BEHAVIOR: EVIDENCE FROM AFRICAN EMERGING MARKETS

Pages : 692-699

View : 84 | Download : 89

Publication Date : 2023-10-09

Article Type : Research Paper

Abstract :The emergence of Coronavirus Disease (COVID-19) pandemic, which spread all over the world, created a shock effect on financial markets as in all areas. With fear and panic, investors couldn’t make rational decisions and tried to imitate what other investors were doing. Unlike the idea of the efficient market hypothesis, investors showed herd behavior during the emergence of the pandemic. Hence, this paper investigates whether COVID-19 increased herding behavior in African emerging markets. We use a sample from the Johannesburg Stock Exchanges (JSE) and the Egyptian Exchange (EGX) for the period from January 4, 2010, to June 30, 2020. We find strong evidence of the presence of herding behavior in both stock markets during the COVID-19 period. Robust results are found in different sub-periods. The result of the study is important to help individual and institutional investors as well as financial regulators to find a solution to prevent herd behavior.
Keywords : COVID 19, Sürü Davranışı, Güney Afrika, Mısır

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