Title: Herding behaviour in Turkish stock market sector indices: the effect of COVID-19 outbreak

Authors: Kıymet Yavuzaslan; Nasif Ozkan

Addresses: Aydin Faculty of Economics, Department of Economics, Aydın Adnan Menderes University, 09000, Aydin, Turkey ' Kutahya Faculty of Applied Sciences, Department of Finance and Banking, Kutahya Dumlupinar University, 43100, Kutahya, Turkey

Abstract: Within the framework of isolation and social distance rules, the most important method of avoiding the COVID-19 virus, has taken place in the social life and the economic activities of people. The COVID-19 outbreak has driven uncertainty in all financial markets, and also recent studies have determined a direct relationship between the irrational decisions of investors and the pandemic. After the COVID-19 outbreak, principally, the herding behaviour has been observed in almost all the emerging stock markets. We analysed the sixteen Borsa Istanbul sector indices using the methodology of Chang et al. (2000). During the COVID-19 outbreak, we validated the existence of herding behaviour in the food, beverage, and banking sectors. Besides, we found evidence of herding behaviour in most of the sectors in upmarket conditions, while we confirmed only in the Food, Beverage sector in both the up and down market conditions.

Keywords: COVID-19; behavioural economics; stock market; herding behaviour; sector indices; Turkey; BIST.

DOI: 10.1504/IJMEF.2022.128476

International Journal of Monetary Economics and Finance, 2022 Vol.15 No.5, pp.430 - 450

Received: 14 Apr 2021
Accepted: 25 Jun 2021
Published online: 24 Jan 2023 *

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