Herding Behavior of Ghana Stock Market Participants: A Daily Analysis

Abstract

This study investigates the herding behavior of Ghana stock market participants and its impact on stock returns. Using panel data of 38 equities listed on the Ghana stock market, the data spans from 2011 to 2019. Fixed effect model was used for all estimations. Overall, the study results failed to indicate evidence of herding behavior in the Ghana stock market. This result further indicates that at low levels, the market participants herd but at higher levels, there is the absence of herding behavior. In bull market conditions, market participants act in unison only at high levels. The result validates the assumption of the rational asset pricing model.