A Study of Herding Behavior on Vietnam Stock Market

Vietnam stock market herding behavior CSAD model Cross-sectional standard deviation of return

Authors

  • Thuy Nguyen
    Thuyquy288@gmail.com
    Dong Nai Technology University, Faculty of Accounting – Finance, Bien Hoa City, Vietnam; National Kaoshiung University of Science and Technology, Department of Industrial Engineering and Management, Kaoshiung City, Taiwan
November 17, 2022

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Herding behavior is a term used to describe how a group of investors will imitate one another in order to make judgments and take action. The CSAD model developed by Chang et al. (2000) is used in this study to investigate herding behavior in the Vietnamese stock market. The empirical findings demonstrate the presence of a herding tendency in this market. The market return is further separated into subgroups to show that herd behavior manifests under various market situations. The findings show that when markets start to fluctuate, investors have a larger tendency to follow the crowd (the market is going up or going down, or the market has an extremely high return or extremely low return). The impact of the Singapore stock market on the Vietnam stock market is then evaluated. This empirical finding may be used by investors to develop investment plans and broaden their prospects for profit.