Herding in financial markets: a review of the literature

Abstract

Purpose

The purpose of this paper is to provide a review of theory and empirical evidence on herding behavior in financial markets.

Design/methodology/approach

Review and discussion of the literature.

Findings

More than two decades of empirical and theoretical research have provided a significant insight on investor herding behavior.

Research limitations/implications

The discussion indicates that there are still open issues and areas with inconclusive evidence, e.g. the author knows relatively little for markets other than equity markets.

Practical implications

The paper may need empirical methodologies to evaluate herding that address current limitations.

Originality/value

The paper reviews recent empirical evidence and identifies open issues for future research.

Citation

Spyrou, S. (2013), "Herding in financial markets: a review of the literature", Review of Behavioral Finance, Vol. 5 No. 2, pp. 175-194. https://doi.org/10.1108/RBF-02-2013-0009