Open AccessThe Impact of Herding Behavior on Stock Mispricing: The Case of Listed Companies at the Egyptian Exchange
Author(s) -
Nader Alber,
Ehab Ezzat
Publication year - 2021
Publication title -
european journal of business and management research
Language(s) - English
Resource type - Journals
ISSN - 2507-1076
DOI - 10.24018/ejbmr.2021.6.4.917
Subject(s) - herding , stock exchange , herd behavior , stock (firearms) , bivariate analysis , monetary economics , economics , econometrics , exchange rate , business , financial economics , finance , statistics , mathematics , geography , archaeology , forestry
This paper aims at examining the impact of herding behavior on stock mispricing. Herding behavior is measured by Cross Sectional of Standard Deviation (CSSD), while stock mispricing is measured by the difference between the market value and intrinsic value of stock. This has been conducted using a sample of 24 companies are listed at the Egyptian exchange during the period from 2002 to 2018.
Results indicate there is a significant effect of herd behavior on stock mispricing in a bivariate context, while the effect remains significant, even after controlling for inflation rate and discount rate. Besides, the discount rates don’t seem to have any significant effects on stock mispricing.