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Bulk and block holders herding behaviour

Ganesh R. (St Mary’s College, University of Calicut, Sulthan Bathery, India)
Naresh Gopal (Dartmouth Charlton College of Business, University of Massachusetts, Dartmouth, Massachusetts, USA)
Thiyagarajan S. (Department of International Business, Pondicherry University, Pondicherry, India)

South Asian Journal of Business Studies

ISSN: 2398-628X

Article publication date: 14 June 2018

Issue publication date: 5 July 2018




The purpose of this paper is to examine industry herding among the institutional investors and to find whether their herding behaviour is intentional or unintentional.


The study uses Lakonishok et al. (1992) model to examine the presence of industry herding behaviour among institutional investors. To determine whether the herding observed is intentional or unintentional, herding measure is regressed with volatility, volume, beta and return. The period of the study is from 1 April 2005-31 March 2015.


The findings of the study showed that though institutional investors have herding tendency towards most of the industries, in the overall period industry herding was not significant. The herding found in some industrial sectors was linked to economic performance of those sectors in India during the period of study and hence the herding was unintentional in nature.

Research limitations/implications

This is the first attempt to study industry herding among institutional investors and their intent in Indian market ever since the country opened its market to foreign investors in a big way. Present study is limited to the use of only bulk/block data instead of the entire trading data for the period.


This study is the first attempt to investigate industry herding behaviour of institutional investors in the market using their bulk and block trading data. The herding observed in well performing industries has been shown to be unintentional and hence rational. The results indicate that the entry of big institutional investors, including foreign institutions into the Indian market has not destabilised the market by irrational herding.



R., G., Gopal, N. and S., T. (2018), "Bulk and block holders herding behaviour", South Asian Journal of Business Studies, Vol. 7 No. 2, pp. 150-171.



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