Title: Herding behaviour and capital structure decision in BSE listed Indian firms

Authors: Raveesh Krishnankutty; Teena Bharti; Nidhi Mishra

Addresses: Department Finance and Accounting, Indian Institute of Management, Prabandh Vihar, Bodh Gaya, Bihar 824234, India ' Department Finance and Accounting, Indian Institute of Management, Prabandh Vihar, Bodh Gaya, Bihar 824234, India ' Department Finance and Accounting, Indian Institute of Management, Prabandh Vihar, Bodh Gaya, Bihar 824234, India

Abstract: This research tries to analyse the herding behaviour in Bombay Stock Exchange (BSE) listed firms in three sectors, namely manufacturing, services (other than financial services), and the real estate and construction sectors. It tries to exhibit the existence of herd behaviour in Indian firms to follow the mean capital structure of their respective sector. OLS estimation with robust and White, Rogers, Newey-West and Driscoll-Kraay standard error was used to examine the existence of herding behaviour in Indian corporates. The finding suggests that strong herding behaviour exists in all the three sectors under study. The study adds to the existing knowledge base on micro, small, medium and large enterprises.

Keywords: Bombay Stock Exchange; BSE; capital structure; Indian firms; herding behaviour; panel data; Driscoll-Kraay standard error.

DOI: 10.1504/IJMFA.2022.122226

International Journal of Managerial and Financial Accounting, 2022 Vol.14 No.2, pp.118 - 137

Received: 29 Aug 2021
Accepted: 17 Nov 2021
Published online: 12 Apr 2022 *

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