The impacts of stock characteristics and regulatory change on mutual fund herding in Taiwan.
Hou, Tony Chieh-Tse
McKnight, Phillip J.
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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: http://dx.doi.org/10.1080/09603107.2013.866201
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.