Empirical findings on herding behavior among institutional investors suggest that those market participants speed up the price adjustment to new information and as such stabilize stock prices. Other findings indicate the opposite, that institutional herds drive stock prices away from fundamental values, and thus destabilize stock prices. This study examines the effect that Swedish institutional investors have on the stock prices on the Stockholm Stock Exchange. More precisely, we analyze the relationship of institutional herding with future excess stock returns. Major findings from this paper suggest that persistent herding among Swedish institutional investors leads to future long-term return reversals, which to some extent indicates a destabilizing influence at long horizons.
| Identifer | oai:union.ndltd.org:UPSALLA1/oai:DiVA.org:uu-298134 |
| Date | January 2016 |
| Creators | Frosteby, Martin, Iliesiu, Silviu |
| Publisher | Uppsala universitet, Företagsekonomiska institutionen, Uppsala universitet, Företagsekonomiska institutionen |
| Source Sets | DiVA Archive at Upsalla University |
| Language | English |
| Detected Language | English |
| Type | Student thesis, info:eu-repo/semantics/bachelorThesis, text |
| Format | application/pdf |
| Rights | info:eu-repo/semantics/openAccess |
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