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Herding Through the Ages: Historical Perspectives and Modern Implications

Herding Through the Ages: Historical Perspectives and Modern Implications
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Author(s): Ooi Kok Loang (Universiti Malaya, Malaysia)
Copyright: 2025
Pages: 22
Source title: Psychological Drivers of Herding and Market Overreaction
Source Author(s)/Editor(s): Ooi Kok Loang (University of Malaya, Malaysia)
DOI: 10.4018/979-8-3693-7827-4.ch006

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Abstract

This study investigates the multifaceted influences on herding behaviour in financial markets, focusing on the impact of historical market events, regulatory changes, economic indicators, social and political events, and technological advancements. Utilizing market structure as a moderating variable and investor learning as a mediating variable, the research provides a comprehensive analysis of the dynamics that drive herding behaviour. The study employs panel data regression and structural equation modeling to analyze the interactions between these variables and their collective impact on herding behaviour. The findings indicate that historical market events, regulatory changes, economic indicators, social and political events, and technological advancements significantly influence herding behaviour. Market structure moderates these relationships, with certain structures either amplifying or dampening the effects. Additionally, investor learning mediates the impact of these factors, with higher levels of financial literacy and education mitigating herding behaviour.

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