Investor herding behaviour in globally listed shipping stocks

ABSTRACT

This study undertakes one of the first empirical attempts to investigate and contribute a set of innovative findings to investor herding behavior and herding spillover effects in globally listed shipping company stock returns. Distinguishing between OECD and Non-OECD markets, herding behavior is tested on a diversified set of shipping companies traded in international equity markets, over different business cycle phases, financial crises, and external shocks. A set of dynamic models, well established in the relevant behavioral finance literature, is implemented. Empirical evidence indicates investor herding behavior in shipping stock returns and herding spillover effects between different shipping sectors, albeit not robust in all cases. These challenging findings can have a material impact on efficient investment and financing decisions of shipping market players.

KEYWORDS:

• Behavioural finance
• investor herding patterns
• herding spillover effects
• global listed shipping companies

Disclosure statement

No potential conflict of interest was reported by the authors.

Notes

1. The authors would like to thank an anonymous referee for raising this point.

2. The authors would like to thank an anonymous referee for raising this point.

3. The authors acknowledge that parts of the paper draw from preliminary research in Bakos (2016) MSc Thesis.